• Thu. Feb 29th, 2024

Avalanche slips back into the consolidation zone, but how far can the price drop?

  • Avalanche’s AVAX has slipped below a key breakout zone as price corrects

  • AVAX price has more than doubled since June

  • The token faces further bearish pressure after breaking below the 21-day MA

Avalanche AVAX/USD is trading at $26.12. The price is a slight drop from around $30 at the start of the month. It should be noted that $27.5 is the key resistance zone for the token. Investors could have started to take profit as the price was more than doubled from $13 in mid-June.

The level between $21 and $27.5 is very important for AVAX. It is the consolidation zone that allowed the 50-day MA to join support for AVAX. As AVAX enters the zone, investors could be looking at the slightest indication of a bullish reversal to buy. We project further bearish weakness, with the 50-day MA as the reference level. 

AVAX breaks below 21-day MA to enter the consolidation zone

Source – TradingView

Technical levels for AVAX are $27.5. Now resistance and support zones are at $21 and $16. The suggestion is that if the price does not recapture the $27.5 level, it could drop next to $21. The MACD line has closed below the moving average, pointing to building bear weakness.

However, we should remember that the 50-day MA is currently at $22.8, above the main support. The moving average coincides with a market event area where AVAX faced some resistance. The region between $22 and $23 should be watched closely as another potential reversal zone.

Summary

AVAX has entered a consolidation zone after slipping below $27.2. The token could fall to the next support at $21. However, the area around $23 could offer support and ignite a bullish reversal. The level also coincides with the 50-day moving average.

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