- Avalanche rose above a range formation but could not make a clean breakout.
- The demand remained strong, though the momentum has slowed over the past ten days.
Avalanche [AVAX] was in an uptrend, but its momentum had stalled over the past week. The demand for the altcoin was still high, and its selling pressure was minimal.
This might change if we see a Bitcoin [BTC] pullback.
Source: AVAX/USDT on TradingView
On the 1-day chart, a range formation almost 3 months old was seen. Marked in white, the range reached from $16 to $22.9. In May, the mid-range level at $19.5 served as a launchpad for the bulls.
From this support level, a strong influx of demand sent Avalanche prices rocketing higher to $26, a 32.5% gain in three days. Yet, the bulls were stalled in this region. In the first half of February, the $26.5-$28 region had served as resistance.
At press time, the same area acted as a supply zone, making it difficult for prices to advance higher. The A/D indicator has continued to trend higher in May, but AVAX has fallen just under the range highs.
The MACD captured the shift in momentum in the market. It formed a bearish crossover and was headed toward the zero line, indicating weakened bullishness.
Clues from the Avalanche liquidation heatmap
The 3-month liquidation heatmap showed that the Avalanche price dip might go deeper. A buildup of liquidity was seen at $21.5 and $21. These levels also marked the local lows from mid-May, making them a feasible short-term price target.
The market structure on the 1-day chart remains bullish, but a session close below $22 could trigger a bearish shift.
If that happens, Avalanche may face a deeper correction, with $19 acting as a key level due to its high concentration of liquidation orders, potentially pulling the price lower.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
