The Avalanche market rallied a bit on Monday, but as you can see, we have been selling off quite drastically. In fact, you could say that Avalanche lived up to its name since the $80 level. The Monday candlestick was an attempt to regain some ground but ended up selling off late in the day to form a bit of a shooting star. The shooting star is obviously a negative candlestick, and it looks like we are trying to test the $30 level to see if that previous support holds as resistance. So far, it has.
There is absolutely nothing on this chart that tells me we cannot reach the lows again, and then perhaps plunge below $20. As the crypto space collapses, there’s no reason to think that some of these coins won’t. I don’t necessarily think that Avalanche will disappear, but to say it was overvalued was an understatement. At this point, I think $20 will be an area of interest, but it’s very likely that we will break below there as well. I don’t think it will be done in one fell swoop, but it certainly seems likely.
At that point, I would anticipate that Avalanche could drop another 50% to reach the $10 level. As far as buying is concerned, I really don’t have a situation in which I would do so for anything more than a short-term trade, and quite frankly I don’t have any interest in trying to “catch a falling knife.” I believe that the $30 level will continue to offer significant resistance, thereby allowing the market to sell off every time there is the slightest hint of trouble.
If we did break above the $30 level on an impulsive green candlestick, then we could go looking as high as $50, and that certainly is possible in a bear market. After all, bear market rallies tend to be very vicious, as we have just seen in the S&P 500. However, crypto has a fraud problem that it is trying to address right now, so trust is very low in this market, and all coins are being treated with suspicion. This is especially true with the smaller markets, which quite frankly need Bitcoin to get its act together before they can show any real signs of life again.
