The Avalanche (AVAX) chart shows a textbook example of a rounding bottom pattern in the daily time frame chart. Under this pattern’s influence, the altcoin today breached the $28.8 resistance, preparing to surge higher. However, the trades have to undermine overhead supply pressure to give a candle closing above this barrier.
Key points:
- The long-tail rejection on august 8th suggests the sellers defend the $28.8 barrier with vigor
- The AVAX chart shows a bullish crossover between the 20-and-50-day EMA
- The intraday trading volume in Avalanche coin is $891.6 Million, indicating a 6.68% gain.
Source- Tradingview
The AVAX/USDT pair shows a phenomenal reversal in the price trend after hitting the low of $14.94 in June 2022. The bullish reversal accounts for a price jump of 118% over the past two months reaching the psychological mark of $30.
The sudden reversal in the price trend shows a rounding bottom pattern with a neckline at the $37 horizontal level. Moreover, the recent bullish engulfing candle breaking the $28.44 level displays an increase in the buying pressure.
Despite the bullish reversal trend gaining momentum, a candle closing above the $28.75 mark will be an essential signal confirming the rounding bottom pattern formation.
In short, the coin holders can expect the bullish rally to reach the overhead resistance of $37 once a bullish candle closes above the $32 horizontal level.
However, if the market condition goes south, A lateral trend could be observed between the $28.44 and $32.19 horizontal levels. But in a more bearish market, a downtrend retesting the $22 mark is possible.
Technical indicator
DMI indicator: the DI lines Display a huge bullish gap with an increasing trend momentum evident by the positive turnaround in the ADX line.
Bollinger Band: the AVAX price moves above the indicator’s upper band, suggesting the traders have overextended their buying. As a result, the recovery may stall for a while or suffer a minor correction testing the midline.
- Resistance levels: $32.5 and $36.5
- Support levels: $26.2 and $20.26
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