The price of this altcoin has more than doubled in 2023, but the growing divergence between several key metrics indicates a bearish trend ahead.
Altcoin price chart shows a bearish trend
The daily AVAX chart shows a classic bearish divergence between its price and the relative strength index (RSI), a momentum oscillator that has formed since Jan. In other words, the AVAX price has been climbing higher since the said date. But on the other hand, the daily RSI of the coin is forming lower highs. This divergence indicates a slowdown in the momentum of the AVAX/USD pair, which could lead to a price reversal.
Additionally, falling volumes along AVAX’s ongoing uptrend also provide the same bearish clues. Price-RSI and price-volume divergences are emerging as AVAX price continues its 2023 uptrend. In particular, Avalanche rose more than 100% year-to-date to $22.50 as of February 2, aided by increased risk-sensitivity and news about its partnership with Amazon.
On January 31, Avalanche partnered with Intain, a structured finance platform that has facilitated more than $5.5 billion in assets in more than 25 deals, to run the digital marketplace IntainMARKETS through the IntainMARKETS Subnet. The price of AVAX increased by about 20% after the announcement.
AVAX’s price exposures fell 30% in February
AVAX price successfully closed above two key resistance levels during the ongoing rally. Also this is a few months descending trendline (black) and 200-day exponential moving average (200-day EMA; blue wave).
Avalanche is now targeting a break above $22.75, which has acted as resistance since August 2022, and a potential break to $30 as the next upside target. This level also coincides with the falling wedge break target discussed in this analysis. That is about 30% gain from current price levels.
Conversely, a pullback from the resistance level fueled by the bearish trend indicators discussed above could send the altcoin price towards the 50-day EMA (red wave) at around $15-16, down about 30% from current prices.
Inflation has fallen
The market reacted positively to the Fed chairman’s statements as markets awaited rate hikes and Jerome Powell indicated more rate hikes to come. After the United States Federal Reserve Chairman Jerome Powell stated that inflation in the world’s largest economy was beginning to slow, the price of Bitcoin surpassed the $24,000 ceiling and the total crypto market cap increased by nearly 4%. However, it is momentarily declining.
The rate hike and Powell’s remarks seemed to have bogged down well in the crypto markets, which traded sideways on the way to the conversation but had a market cap of over $40 billion in the hours after the announcement.
cryptocoin.com The global crypto market cap has now reached $1.09 trillion, an increase of 3.88% compared to the last day. Meanwhile, BTC hit just over $24,000 for the first time in 2023. Afterwards, it fell again and is momentarily traded at $23,429.
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