Is Avalanche (AVAX) Ready to Bounce? Traders Eye Relief Rally After Oversold Dip
Avalanche (AVAX) has been on a downward drift, with the token consolidating just above the $19.5 support zone amid mounting bearish pressure.
Despite several attempts to reclaim higher ground, the momentum indicators continue to reflect seller dominance, suggesting that the asset remains in a corrective phase.
Avalanche Price Faces Weak Momentum and Bearish Pressure
The daily chart reveals that AVAX’s short-term trend remains under strain, with both exponential moving averages (EMAs) tilted downward.
Daily chart for WAVAX/USD (Source: GeckoTerminal)
The 9-day EMA sitting below the 20-day EMA indicates that sellers continue to control near-term price action. While the recent closes show limited volatility, the fact that prices remain below both EMAs underscores persistent weakness and a lack of sustained buying interest.
Momentum indicators such as the MACD are gradually flattening, suggesting that the bearish momentum may be losing steam.
The histogram’s approach toward neutral territory hints at the potential for a near-term recovery if buyers step in at current levels. However, the RSI hovering in the low 30s still signals that the asset is technically oversold, leaving room for a relief bounce — though not yet confirmation of a bullish reversal.
Key Levels to Watch
The immediate area around $19.54 to $19.55 has proven to be an essential support zone. A decisive daily close below this range could expose Avalanche to a deeper pullback toward $18.76, marking a critical level where traders may anticipate buyer accumulation.
On the upside, $20.49 acts as the first meaningful resistance. Breaking above it could open a path toward $22.42–$22.57, where stronger supply pressure is expected.
Until the Avalanche price decisively breaks out of this consolidation range, AVAX is likely to continue oscillating between these zones, with traders waiting for a clearer signal of direction.
Order Book Dynamics Suggest Volatility Ahead
A closer look at Avalanche order book data provides an interesting picture of potential liquidity shifts.
On the downside, substantial bid walls exist at $15, $10, and $9, showing deep-pocketed buyers positioned to defend these zones. The largest is the $10 bid wall, with over 45,000 units (≈$454,000) ready to absorb sell pressure — though if this level breaks, it could trigger a nearly 49% drawdown, accelerating panic selling.
Conversely, ask walls — clusters of sell orders — stand tall at $19.81, $24, and $28. The nearest at $19.81 holds about 13,398 units, and clearing it could allow the Avalanche price to move marginally higher toward the next resistance zone.
A break through $24 could spark a more significant move, potentially boosting prices by around 22%, while eliminating the $28 wall could unleash a rally exceeding 40% toward prior highs.
These liquidity zones suggest that while downside protection exists, the path upward remains clogged with heavy sell orders that bulls must absorb to regain dominance.
Trading Outlook
Given the mixed technical setup, traders may consider a short-term accumulation strategy if the token continues to hold above the $19.5 support.
A confirmation bounce backed by higher volume could signal a potential long entry with targets near $20.5 and $22.4, and stops set slightly below the $19.5 threshold to manage risk.
For short traders, a clean rejection near $20.5 or a breakdown below $19.5 could offer entry opportunities, with downside targets extending to $18.7 or lower if momentum accelerates.
Until the Avalanche price breaks out decisively above its moving averages and clears key ask walls, traders should remain cautious and watch for confirmation signals rather than anticipate a major trend reversal.
Disclaimer: The information presented in this article is for informational and educational purposes only. It does not constitute financial advice. Ecoinimist is not responsible for any losses incurred. Readers should exercise caution before acting on this content.
