Investors appear to be taking profits after the avalanche (AVAX) price shot up 720% in the past two months.

Local peaks

Avalanche has seen its price drop nearly 22% since the weekly trading session began. The Ethereum Destroyer fell more than 15 points in market value, from a high of $ 70 to as high as $ 54.84 before recovering. AVAX is currently trading at $ 61.7 at press time.

The downward price movement appears to have been predicted by the Tom DeMark (TD) Sequential Indicator. This technical indicator gives sell signals in the form of nine green candles on the 1-week, 1-day and 12-hour charts of AVAX. That prediction that Avalanche will most likely suffer a steep correction seems to have been confirmed today.

Sustained selling pressure could result in further losses as the TD setup predicts a retracement of one to four candles in any of the aforementioned timeframes.

Source: TradingView

The Fib retracement indicator, measured from the July 20 low of $ 9.31 to an all-time high of $ 76.33, shows that Avalanche is more likely to turn down before finding new stable support.

An increase in sell orders behind this cryptocurrency could push the price towards the Fib retracement level of 50% or 61.8%. These key support levels are at $ 42.82 and $ 34.91, respectively.

Source: TradingView

Despite the pessimistic technical analysis, it is worth considering the increasing activity on the AVAX network. In the past few weeks there has been a steady migration of dApp users from other networks like Ethereum to Avalanche as it offers cheaper and faster transactions.

Data from DeFi Llama shows that Avalanche’s Total Value Locked (TVL) has skyrocketed since August 19 and hit a new record high of $ 2.96 billion on September 9.

The source: DeFi Lama

Further network growth could provide the impetus for Avalanche’s bullish price action. As such, market participants should keep an eye on the resistance at $ 76.33. Overcoming this hurdle could push AVAX to $ 100 or higher.

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Annie

According to crypto briefing

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