Chartpunk Avalanche Brief #1
The Avalanche platform has well earned its place among the top decentralized blockchain projects. I will publish periodical technical analysis on its AVAX token, hoping to provide you with nice alpha. Hopefully, together we will be able to ride strong trends and avoid sharp losses. Being a trend trader, I am not promising to pinpoint exact highs and lows, but I hope my view will assist you in making your own decisions.
HTF Market Structure
The high time frame $AVAX chart is bullish. The uptrend of late July is intact with consecutive higher highs and higher lows. Price is currently trending near the bottom trendline support of the ascending channel. We have just seen a confident bounce off the trendline and AVWAP support at the $100 price level. The stochastic RSI has come back from overbought zone on the 3-day chart, assisting the buildup of a new bullish momentum.
HTF support of the bulls is currently the zone of $102–110 between the trendline and short AVWAP levels.
HTF price targets are the $150 ATH level, and then the mid-line resistance of the ascending channel around $190.
LTF Market Structure
On the low time frame chart the $AVAX token is in a nice uptrend, with trendline support currently at $112. The short downtrend of November 22 has been tackled, and its AVWAP level of $118 has been turned into support by the bulls. The all time high zone of $136–150 is the upcoming resistance in front of the bulls.
Based on the HTF and LTF market structure analysis, I consider the zone of $135–150 as resistance and the zone of $100–110 as support. $AVAX is in a bull market, both on the high time frame and on the low time frame charts.
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What is trend trading?
Trend trading is a market strategy that is reasonably different from swing trading or day-trading. A market “trend” is a tendency of a financial market price to move in a particular direction over time. Swing traders and day-traders are usually trying to pinpoint low-term market tops and bottoms, and take aggressive positions expecting to profit from a swift change of market direction. Trend traders are looking for consolidated and strong directions on a given market, and are trying to ride the trend for as long as possible. These traders normally enter in the market after the trend “properly” establishes itself. My core strategy in trend trading is to look for a market setup where the long time frame market structure is indicating a solid trend, and intact price action is supported properly by the low time frame charts.
What are my key indicators?
I am using trendlines, channels and moving averages to identify market structure and to spot trends. In crypto trading my core moving average indicators are the 50 and 128 daily moving averages. I am also using anchored volume weighted average price (AVWAP) analysis to identify support/resistance levels.
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The present article is a free material, for entertainment and educational purposes. Nothing in this post shall be considered as financial advice, you shall never make any financial decisions or financial investments based on a singly source of information and without doing your own research.