Avalanche price gains 17% in a week, could this be a dead cat bounce?
- Avalanche price closes in on $20.00 after a 17% move from support at $15.00 in seven days.
- Recovery to $20.00 is unlikely unless bulls annihilate resistance at the 200-day SMA.
- Avalanche releases Core, a platform providing users a better way to connect to Web3.
Avalanche price is almost recouping gains to $20.00 after capitalizing on a widespread relief rally. With support at $15.00 intact, buyers steadied the push to higher levels, weakening the seller congestion zones at $16.00 and $17.00.
AVAX now sits on top of this ($17.00) resistance-turned-support while bulls deliberate on the next move to $20.00. However, overhead pressure at $18.00 may jeopardize the Avalanche price uptrend and increase the risk of a retracement.
Avalanche price bears seeking revenge
Avalanche price might change its technical outlook bullishly if buyers eke out an additional swing above the 200-day SMA (Simple Moving Average) (in purple), as shown on the eight-hour chart below.
However, that moving average reinforces a significant resistance at $18.00, likely to absorb the momentum behind AVAX. This area functioned as support, although only briefly in early September. Efforts to recapture the same level have been futile, thus the glaring possibility of another trend reversal.
AVAX/USD eight-hour chart
Furthermore, the RSI (Relative Strength Index) may exacerbate the situation against the bulls if it taps into the overbought region. As a rule of thumb, prices tend to correct amid overbought conditions. In the case of Avalanche price, it would be prudent to watch out for RSI moving into and then exiting overbought. A reentry into the neutral zone from overbought levels is a good time to lock in gains while scanning for new short positions.
On the other hand, a break above the 200-day SMA could reaffirm the uptrend, allowing traders to tap more profitable long positions. For conservative traders, $22.00 is a potential take-profit target, but extremely bullish investors have the option of moving with AVAX’s trend to $30.00.
In other news, Avalanche has recently released a new platform called Core. Think of it as a command center for everything AVAX. Users can view their portfolios, execute transactions on-chain and access network stats on the same platform.
Important #Avalanche update:
— Avalanche Support (@avaxtechsupport) October 26, 2022
The Avalanche Bridge at https://t.co/X0XclUBs6e is moved to a different URL. The Avalanche Bridge now exists within Core web and can be found in the Core web command center and at https://t.co/F3QtAh21KS, all with the same features and functionality.
Core is a bridge between Avalanche and Web3 because users have the opportunity to find and link to dApps (decentralized applications) ecosystems.
Author
John Isige
FXStreet
John Isige is a seasoned cryptocurrency journalist and markets analyst committed to delivering high-quality, actionable insights tailored to traders, investors, and crypto enthusiasts. He enjoys deep dives into emerging Web3 tren
