Comprehensive Technical Analysis of Avalanche (AVAX) — June 5, 2025

1. Trend and Price Action Overview

• Long-Term Trend:
  • Monthly & Weekly Chart Context (from Daily Bars): Reviewing the last three months, AVAX surged powerfully from ~$17-18 (early March lows), peaking above $25 in mid-May, before a clear, sharp reversal to current levels <$19. The longer-term structure previously established higher highs and higher lows until the uptrend was broken mid-May, initiating a notable corrective phase.
  • Recent Price Movement:
    • Short-Term Breakdown: Recent daily closes show a persistent pattern of lower highs and lower lows, marked by heavy volume selloffs on May 29–June 5.
    • Current Price Action: The most recent bar closes the session at $18.60 following an intraday capitulation, marking a steep drop from the previous day’s near-$20 close and breaking below the prior major support region (~$20–20.20).

2. Volume & Volatility Analysis

• Volume:

  • Volume has spiked dramatically during selloff periods. The strongest selling (over 400M–700M AVAX traded daily) occurred during the last three major down days: May 29–June 5. These high-volume red days (especially today) indicate panic or forced liquidations.
  • Lighter volume on recent minor green days (relief rallies) points to weak buying conviction.

• ATR (Average True Range) Proxy:

  • Calculating average price range for recent bars: over the past week, daily ranges have exceeded $2, well above the prior month’s average, confirming an uptick in volatility consistent with breakdown and high trader anxiety.

3. Key Support and Resistance Levels

• Support:
  • Major Support: $18.75–$19 (recent June 1–4 lows) — broken intraday today, now acting as resistance.
  • Next Support: $17.95 (March 9 breakout point, and also the March 10 close), then $16.80 and $15.99 (April/early-March lows).
• Resistance:
  • Immediate Resistance: $19.30–20 (prior support, now likely flipped to resistance).
  • Further resistances at $20.90–21.20 (recent swing highs, now very distant given the depth of the plunge).

4. Candlestick & Chart Patterns

• Daily Bar Review:
  • May 29–June 5: String of large bearish bars, large real bodies, closes near lows — classic bear trend confirmation.
  • Today’s close (June 5) forms a broad range red bar, closing at the low, implying strong directional momentum.
• Patterns:
  • Breakdown & Retest Failure: The $20–$20.20 area acted as support mid-May, with repeated intraday bounces. Today’s full breakdown below this level on high volume, closing at the low, is a classic continuation signal.
  • No bullish reversal (hammer, doji) evident.

5. Moving Averages (EMA/SMA)

• Short-Term (10/20 EMA):
  • Based on recent highs/lows, the 10-EMA is now sloping downward (approx. ~$20.10–20.50), with price well below it.
• 50/100 MA:
  • Likely crossing down, indicating bearish medium-term momentum.

6. Momentum Oscillators (RSI, MACD, Stochastics)

• RSI Estimation:
  • Price is deeply oversold after the quick $5–7 drop (from $25→$18.6). A proxy RSI is probably in the low/mid 30s, possibly slightly under 30.
  • However, in strong trends, oversold RSI can persist—especially as the market enters a ‘liquidation’ phase.
• MACD:
  • Histogram and signal lines likely crossing bearishly, as momentum is strong to the downside.
• Stochastics:
  • Likely in oversold territory, but no bullish divergence or preliminary cross upward is apparent, so selling pressure prevails.

7. Order Book Dynamics & Microstructure (from Intraday Data)

• Intraday Deterioration:
  • Hourly charts show a steep, accelerating decline from $20.50 to $18.60 in the 24h prior to this analysis. No intraday stabilization is observed, volumes spike sharply towards the close, and every sign of a short-term bottom is lacking.
  • No strong demand absorption at lower levels noted; each bounce (to $20, then $19.7–19.3) is met with renewed selling.

8. Volatility & Psychological Sentiment Analysis

• Behavioral Pattern:
  • The size of the drop, combined with high volume, likely triggered margin calls and forced liquidations, causing exacerbated moves down.
  • Capitulation may not be entirely complete — traders may continue to de-risk if next key support levels ($18, $17.80, $16.80) break.

9. Fibonacci Retracement and Projections

• Measured Move (March Lows to May High):
  • Swing Low: ~$16 → Swing High: ~$26
  • 61.8% Retracement = $19.01
  • Price is now well below that key fib support, suggesting the next fib level (78.6%) at ~$17.78 could act as the next area bulls might try to defend.

10. Elliott Wave Structure

• Likely Completion of an ABC Correction:
  • Following the impulsive rally to $26, a broad A-B-C correction may be unfolding. Wave C could extend spontaneously lower in high-volatility panics — consistent with the current technical breakdown.

11. Summary Synthesis and Next 24h Prediction

• All trend-following indicators, major moving averages, candles, and volume readouts point to strong selling pressure and unresolved panic.
• No rebound or capitulation bottom is visible yet.
• Momentum oscillators are oversold, but in strong bear moves that can persist for several sessions.
• Risk of further selling down to the $17.80–16.80 region is substantial.
• Any bounce toward the $19–20 level is likely to be heavily sold into.

12. Trading Decision

• Sell (Short Position):
  • Given the clear breakdown below multi-month support and the strength of the current move, initiating a short position is favorable.
• Optimal Entry (Open Price):
  • Upon any minor bounce to $18.80–$19.00 (prior support, now resistance), initiate the short.
• Target (Close Price):
  • Aim to cover at $17.00, where next major structural support and 78.6% fib level cluster. Partial profit-taking/adjustment can be done between $17.80–16.80 if heavy buying emerges.

Conclusion: The path of least resistance remains down. The market structure is technically broken, with no bullish reversal signs. Position sizing and risk control should be tight — note the potential for a sharp short-covering bounce if bulls stage a reaction at the next support, but until then, momentum remains decisively bearish.