AVAX price consolidation likely to end in 10% decline
|- Avalanche price is throwing traders left and right as volatility picks up.
- AVAX looks for direction as it currently consolidates in the middle of this week’s range.
- Expect to see some pressure to the downside as several elements demand a risk premium gets priced in.
Avalanche (AVAX) price is in search of direction as its rides the waves of the market at the moment. Although the correlation with big tech has been breaking down these past few months, it is undeniable that recent earnings influence the sense of direction for AVAX. Expect to see consolidation to continue with a possible leg lower as several tail risks are still bound to grow and require a risk premium of roughly 10%.
Avalanche price to slide below $16.50
Avalanche price has had a whipsaw week thus far as volatility has picked up in recent trading. If the idea that AVAX volatility is linked to the earnings from a few big tech firms is open for debate, that it is moving investors is a given. With recent lawsuits and developments in the crypto and alt-currency landscape, risk premiums still need to be deducted from the current price and should mute any further upside potential for now.
AVAX thus consolidated at $17.40 and is set to break further toward $16.75 at the monthly pivot. That monthly pivot has already been broken several times this month and does not hold any firm support anymore. Expect to see a quick decline toward $16 and test that 200-day Simple Moving Average for support, which should be well respected as it has in recent weeks.
AVAX/USD 4H-chart
In case some tail risks can be taken out of the equation, that would revamp AVAX price action and push it to a higher level. That would fit with the 55-day SMA and a bounce off that level. Once the peak from this week at $18.25 is broken, a stretch toward $19.50 could be in the offing, bearing a gain of over 10%.
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