AVAX price prepares for 25% correction as Avalanche sets up double top
- AVAX price created two equal tops at $127.69 on November 30 and December 22, signaling a reversal soon.
- So far, Avalanche price has dropped 9% and is likely to crash another 25% to $90.79.
- A daily close above the double top at $127.69 will invalidate the bearish thesis.
AVAX price has formed a top reversal pattern, indicating that the uptrend is ending. While the bulls attempt to sidestep this fate, Avalanche is likely to come crumbling down soon.
AVAX price eyes lower lows
AVAX price has set two swing highs at $127.69 on November 30 and December 22, leading to a double top reversal pattern. A reversal of the uptrend often follows this setup. The bearish outlook will push Avalanche down to the immediate support level at $101.49. This correction will represent a 17% downswing but is not where AVAX will stop.
A breakdown of this barrier and an increase in selling pressure will knock the altcoin down to the 62% and 70.5% retracement levels at $95.23 and $90.79, respectively. In total, this downtrend will constitute a 25% loss.
Moreover, if things take a turn for the worse, AVAX price will continue to slice critical levels and reach the range low at $75.40. A dip below this barrier will allow market makers to collect the sell-stop liquidity.
AVAX/USDT 4-hour chart
On the other hand, the bearish outlook could be delayed if AVAX price decides to go for the buy-stop liquidity resting above the double top formation at $127.69. While this liquidity run is plausible, a daily close above it will indicate a high and consistent buying pressure, invalidating the bearish thesis.
In this situation, AVAX price could rise by 9% to retest the $139.34 hurdle.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
