Disclaimer: These findings are the sole opinions of the writer and should not be considered investment advice
On the daily chart, Avalanche[1] hit a new set of lows after it broke down below the previous lows at $75.5. Bitcoin[2] found a short-term bottom at $33k but it could still slide further, as could AVAX. Avalanche broke beneath the previous lows on a single candle.
AVAX could see fresh buyers around the $56-area, although a bearish retest of the $75-level could precede this. Bitcoin’s Dominance has bounced slightly from the 39.8% lows it was at recently and stood at 42.4%. Many altcoins could witness another wave of selling before demand can step in, and AVAX could be one of them over the next few weeks.
Source: AVAX/USDT[3] on TradingView
The move from $147 highs to $75.5 was used to plot a set of Fibonacci retracement and extension lines. The week prior to press time saw Bitcoin drop under $40k and AVAX also followed suit as it crashed past the previous swing low at $75.5. The 27.2% extension level at $56 saw the price briefly bounce.
This level coincided with an area of demand around the $50-$55 area (cyan box). The candlewicks to this area showed demand, but the price could visit these lows once again. Such a revisit would offer long-term investors another chance to load up. At the same time, the previous lows at $75.5 are in-between the $72.3 and $79.1 levels of resistance, marking this area as a strong supply zone.
The market structure was bearish, and therefore a retest of the $75-level could play out over the next couple of weeks, followed by a move to the $55 area.
Rationale
Source: AVAX/USDT[4] on TradingView
The daily
