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At the time of writing, AVAX price is trading at $35.9 with daily losses of 2.72%, weekly losses of 26.8%, and monthly losses of 16.0%.
As Christmas approaches, the Avalanche blockchain Cryptocurrency faces strong setbacks amid a crypto market that is also in the red.
The two main cryptocurrencies, Bitcoin and Ethereum, face drops of 8.09% and 14.79%, respectively. The crypto market capitalization fell to $3.31 trillion, a decrease of 1% in the last 24 hours.
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It should be noted that the AVAX price drops despite the implementation of the long-awaited Avalanche9000 update on December 16. In fact, the bearish price movements are consistent with this update.
Although the update is considered the largest since the origin of Avalanche in 2020 and brought great improvements such as reduced operating costs and the ease of launching subnets, the subsequent price reaction was bearish.
So What this movement tells us is a correction after the update. It is likely that the hype around Avalanche9000 has inflated the price and that by undergoing a large correction, it has been driven much further down by the overall bearish movement of the cryptocurrency market.
Therefore, in this context, it is best to turn to the charts to reveal what is happening with the AVAX price from a technical point of view and when it could recover.
AVAX Chart Analysis – Key Signals and Levels to Watch Out for
Firstly, and looking at the chart from a yearly point of view, AVAX price is experiencing a long-term pullback. Over the period of one year the chart appears to form the inverted “shoulder-head-shoulder” pattern, which is bullish.
Analysis of AVAX price charts. Green lines: Resistances. Red lines: Supports.
Right now, the token would be trading at the second shoulder, but without hitting the bottom yet, so there would still be room for lower levels. However, the price would bottom out around $27 from where it would rebound, if this pattern finishes setting up.
Another signal to watch out for is that the price is trading below all of its 20, 50, 100 and 200 EMAs; which denotes that the bears are in control at this moment. The 50 and 20 EMAs have crossed down to the 200 EMA, which predicts an accentuation of the fall.
For its part, the RSI at 36 points shows that the token is close to oversold, which brings AVAX closer to a floor, however, the bears would still have room for maneuver and enough possibilities to take the price much lower.
Supports and resistances for AVAX
Due to the bearish context that this token is experiencing, it is appropriate to start by establishing support levels.
The strongest support for AVAX is $33.92, a level from which the price rebounded strongly on December 20. However, if the price breaks this support, we still have the $27 mentioned in the previous segment.
A fall below that last floor could take AVAX as low as $22.3.
Now, heading towards resistance levels, the first step to a recovery is the $43.16 level, a level in line with the 200 EMA.
If the price managed to establish itself above said level for several days, it would make room for the confrontation of the next resistance level at 55.3 USD, a double top that is quite difficult to overcome and whose break could confront us with 65.5 USD.
The breakout of the last established ceiling would complete the formation of the inverted “shoulder-head-shoulder” patternwhich would allow for more rises, according to the narrative behind this pattern.
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