Market Overview for Avalanche/Tether (AVAXUSDT) on 2025-12-31

Summary
• AVAXUSDT opened at $12.59, hit a high of $12.72, and closed at $12.33 with increased volume of ~2.8 million contracts.
• A bearish engulfing pattern formed around 01:45 ET, confirming a shift in momentum following a bullish consolidation phase.
• RSI hit overbought levels during the early recovery but has since plunged into oversold territory, suggesting exhaustion on both sides.
• Volatility spiked during the late afternoon selloff, with a dramatic drop from $12.45 to $12.21 in the 16:45 candle.
• Bollinger Bands tightened during the morning before expanding sharply as price broke below a key support zone around $12.45.

Avalanche/Tether (AVAXUSDT) opened at $12.59 at 12:00 ET–1, reached a high of $12.72, traded as low as $12.21, and closed at $12.33 by 12:00 ET today. The 24-hour volume was approximately 2,763,027 contracts, with a notional turnover of around $34,810,458.

Structure & Formations

The price action showed a bearish engulfing pattern at $12.65 (01:45 ET), signaling a bearish reversal after a rally. A strong support level at $12.45 was broken late in the afternoon, followed by a deep selloff into $12.21. A doji formed at $12.59 (05:45 ET), indicating indecision after a brief rebound. The Fibonacci 61.8% retracement level of the morning rally appears to be a critical level near $12.42.

Moving Averages and Momentum

On the 5-minute chart, the 20-period and 50-period moving averages crossed bearishly during the afternoon selloff, confirming bearish momentum. The 50-period MA on the daily chart appears to be a key psychological level around $12.40–$12.45. RSI fell rapidly into oversold territory, suggesting potential for a short-term bounce, though momentum remains heavily on the downside. The MACD line turned negative in the afternoon, aligning with the bearish price action.

Volatility and Bollinger Bands

Bollinger Bands contracted during the morning hours before a sharp expansion as price broke below key support levels. The 16:45 candle saw a wide range, with a high of $12.45 and a low of $12.21, illustrating a dramatic widening of the range.

Price closed near the lower band of the Bollinger Bands, a sign of strong bearish pressure.

Volume and Turnover Divergence

Volume increased significantly during the afternoon selloff, with a single candle (16:45) showing a volume of 238,097 contracts. Turnover for that candle reached nearly $2.93 million, the highest of the day. However, volume failed to confirm a rebound in the early evening, indicating a lack of follow-through buying.

Forward-Looking Observations and Risk Caveat

With the recent breakdown below $12.45, the immediate focus is on whether the pair can stabilize above $12.30, which could offer a limited bounce. However, given the heavy volume and bearish momentum seen in the last 24 hours, a further decline toward $12.10–$12.00 is possible. Investors should be cautious of additional bearish catalysts, particularly if broader market sentiment remains negative.