Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- AVAX retested the $15.75 support.
- But bulls faced immense challenges ahead.
Since 21 February, Avalanche [AVAX] retraced by 27% after facing price rejection at $21.68. The $15.75 support level has prevented the drop twice. However, the rebound and potential strong recovery also faced headwinds that bulls should consider.
Read Avalanche [AVAX] Price Prediction 2023-24
Can the $15.75 support hold?
On the three-hour chart, the RSI (Relative Strength Index) has hovered below the 50 mark for the past two weeks. Similarly, the OBV (On Balance Volume) declined significantly in the same period, showing that the buying pressure dropped and the AVAX market structure weakened.
However, the bulls secured the $15.75 support and fronted recovery before the roadblock at the descending line (white) level of $16.84. The mild rally witnessed at the time of writing could also face the same fate if Bitcoin [BTC] fails to reclaim the $22.60K level.
As such, short-sellers could look for profits at the $15.75 support if AVAX fails to overcome the descending line hurdle ($16.49). A breach below the support could be checked by $14.89 or $14.36.
On the contrary, near-term bulls could look for gains at the 23.60% Fib level ($17.15) or 38.20% Fib level ($18.02) if AVAX closes above and retests the descending line. BTC’s surge beyond $22.60k could accelerate the upswing and boost bulls to target even the 50% Fib level ($18.72).
Daily active users and revenue increased into the weekend
According to Token Terminal, AVAX recorded a spike in daily active users on 3 March (Friday). Notably, active users doubled from about 15K to 30K on Friday, showing more addresses traded the token, boosting trading volume and buying pressure into the weekend.
It boosted the recovery after AVAX secured the $15.75 support, but rejection at the descending line blocked the bulls’ efforts.
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In addition, AVAX saw an increase in revenue due to a spike in daily active users. Any increase in daily active users over the next week could boost the recovery and capacity to overcome the hurdles. But a decline in daily active users could tip bears to sink AVAX price.