Avalanche Failed V-Shaped Bottom Calls for More Consolidation
Avalanche (AVAX) price spiked over 21% leaving behind a V-shaped bottom but the flash rally has quickly run out of steam and completely faded out. The sell-off from the $98.77 swing high seems to also be unfolding in a corrective price structure, which calls for more consolidation.
V-Sapped Bottom
V-shaped bottoms are powerful reversal signals with a very rapid accumulation phase.
AVAX developed the V-shaped bottom at a very key price zone between the 0.618 and 0.786 Fibonacci retracement zone.
The sell-off from February 17, 2022, high seems to be correcting the rally from the January 22, 2022, low because we broke the trendline that supported the previous rally, and now at the same time, the sell-off is unfolding in irregular 5-waves, which is corrective in nature.
However, the biggest drawback remains the fact we’re still trading below the previous swing high of $98.77.
More importantly, the bulls would need to clear the $100 big psychological number to add renewed bullish pressure to the current trend.
Moving forward, if we trade below the $98.77 swing high there is a danger, we might continue consolidating inside the $98.77 - $52.95 price range.
