Avalanche (AVAX) has retraced all its gains since November, with the altcoin struggling to hold its ground amidst a strong bearish trend. At press time, AVAX hovered near the $20 support zone, a crucial demand level that could determine its next move. However, market sentiment remained uncertain as downward momentum continued to dominate.
AVAX Struggles to Find Stability Amid Bearish Momentum
Since late January, AVAX has been in a persistent downtrend, breaking below the key $35 support level. The daily chart reflects a firmly bearish structure, with lower lows forming consistently. However, a potential silver lining emerged as AVAX approached the psychological $20 level—forming a bullish divergence on the MACD indicator. This suggests a possible short-term bounce, but not necessarily a trend reversal.
Key Resistance Levels to Watch
AVAX faces multiple resistance barriers on its path to recovery. The 100% retracement level at $22.35, which previously marked the November lows, has now turned into a resistance level. The 20-day moving average (DMA) at $24.24 also presents a significant hurdle. A decisive break above $26.54 would indicate a shift in market structure, signaling a potential trend reversal.
Liquidation Zones Indicate Possible Price Targets
Liquidation data from Coinglass highlights $27.40 as a strong resistance zone, while the $23.40-$24.00 region remains a short-term target for any upward movement. On the downside, the $20 support zone holds significant liquidation clusters. If Bitcoin (BTC) maintains its strength above $85K, AVAX could see a move toward $24. However, a BTC correction could drag AVAX further down to the $19.70-$20 range.
Also Read: Avalanche (AVAX) Surges 80% – Is a Major Bullish Breakout on the Horizon?
While the bullish divergence offers a glimmer of hope, AVAX must breach key resistance levels to confirm a reversal. Traders should remain cautious, closely monitoring Bitcoin’s movements and AVAX’s ability to establish higher swing highs and lows. Until then, the $20 support level remains the last line of defense against further downside pressure.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
