Bitcoin [BTC] found some solid ground at $18.6k and has managed to hold on to the $19k level in recent days. BTC refused to close a daily session below $19k in October. Was this a brave display by the obstinate bulls? Avalanche [AVAX] on the other hand, was more bearish.
Since August, the longer-term trend has been downward, and critical levels of support have been breached on the way down. Another selling opportunity was brewing for AVAX at the time of writing.
Inefficient at $16.5- time to go short?
Source: TradingView
The move down from $16.97 to touch $14.42 was quite steep. The sharp plunge downward on the price charts saw the $16.4-$16.5 zone go without a retest on the way down. Such a gap sometimes has a tendency to get filled before a resumption of the former trend.
In this case, the higher timeframe trend was bearish. Moreover, in October, the $16.4 region has seen multiple candle wicks which saw a strong price move away. This meant that there was significant liquidity in this region.
Short sellers of the past week are likely to have set their stop losses just above the recent local high at $16.43. Therefore, a stop-loss hunt to this territory could materialize over the next few hours. Traders can look to enter near this region and target another leg downward.
Invalidation of this bearish idea would be a session close above $17. A move above $16.6, by itself, would signal short-term bullishness. A move above $16.9-$17 would flip the higher timeframe structure to bullish.
Social Dominance near three-month low
Source: Santiment
The falling social dominance metric indicated that Avalanche was losing ground in the popularity battle. It fell to its lowest level at 0.08% earlier this month, which was well below the 0.17% floor that AVAX had established since late August.
On the other hand, the development activity was on the rise in the past two weeks. This was a good sign for investors who want to make sure the developers are constantly making the network better.
The price prediction bot painted a bearish picture for Avalanche in 2022. Technical analysis showed the daily timeframe to be in a downtrend as well. If Bitcoin witnessed a sharp move lower over the next few days, it could drag Avalanche south as well.
