Watch for the close of Avalanche’s daily candlestick to assess price direction

• Avalanche is trading at the breakout zone after correcting in a bear market

• The Fed’s policy move on Wednesday will determine the price move

• Watch for the close of the daily candlestick for a possible reversal or bear continuation

Most cryptocurrencies are correcting after the recent gains. Profit taking and Fed’s policy action on Wednesday is playing a role. Cryptocurrencies like Avalanche AVAX/USD had previously breached key levels. They remain on the watch list should the Fed hold a soft stance regarding policy tightening.

AVAX is trading at $20.12. The level is close to or at the support of $20.95. AVAX traded and consolidated at $26 as the price pushed through the $20.95 resistance. At the current price, the token is seemingly looking to crash back into the consolidation zone. Nonetheless, it can’t be confirmed yet that AVAX has slipped below the $20.95 support. We need the close of the daily candlestick for confirmation.

AVAX slightly slips below the breakout support

Source – TradingView

Technically, the Avalanche token is bearish at or slightly below the $20.95 support. The short-term moving averages have moved above price and could add bear weakness. The MACD indicator is also about to close below the moving average in a bear market.

While bear pressure remains on AVAX, we cannot confirm a break below the $20.95. Investors should watch for the close of the daily candlestick. It could be a false breakout if the candlestick closes above the support. In that case, a buy signal would be generated. That would, of course, be subject to the prevailing crypto sentiment.

If AVAX closes below the $20.95 support, with a bear crypto sentiment, weakness will continue. The next potential support for the token is $16.

Summary

AVAX is yet to confirm a bearish momentum despite breaking slightly below the $20.95 support. The token could reverse if the daily candlestick closes above the support.