Topdown Analysis Of AVAXUSDT Using Support And Resistance Strategy And RSI Indicator As Confluence

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Hello great minds,

I feel honored to approach you all today to discuss on a very important issue in the cryptospace.

I believe you are all doing perfectly fine and are enjoying your activities in the community as you actively promote steemit across various social media platform.

Today I will be sharing my analysis on the token of avalanche network which is avax, and I will be sharing my analysis on avax against usdt.

Please stay tuned as I share my analysis

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ANALYSIS USING SUPPORT AND RESISTANCE STRATEGY

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Technical analysis are best started from the higher timeframe and then to the lower timeframe.

Some analyst prefer starting their analysis from the daily timeframe, down to the fewer minutes, but I begin mine from the monthly timeframe.

The monthly timeframe helps me to compress market activities and display them on a screen.

And the monthly timeframe also helps in eliminating unnecessary noise from the market.

Beginning with the monthly timeframe of the pair AVAXUSDT, we can see the formation of bullish and bearish candles.

We can also see that there are few candles on this timeframe and this is because each candlestick were formed within the space of 1month.

Also from the above screenshot, we can notice that it is easier for the market trend to be identified, and from the above screenshot we see that the most recent leg of the market is bearish.

Continuing my analysis, I proceeded to the weekly timeframe, and on this timeframe, I could see more market candles than on the monthly timeframe.

And looking carefully, I was able to detect a key level, and this level has functioned effectively as both support and resistance level in the past.

And this level can be said to be a valid level because it has be tested and respected severally by the market, and the most recent bearish move of the market was as a result of its rejection from this level.

To get more market information I decided to the daily timeframe, and on this timeframe, I can see noise in the market.

I could feel the presence of the buyers and sellers as they struggle to drive the market to their preferred direction.

Amidst this, I was able to identify another key level, and this level can be said to be a valid level as it has been respected severally by the market.

And getting to the 4hr timeframe, I could see the market more clearly and I could see clearly that the market has broken below this level.

This support level is now functioning as a resistance level to the market, and the level has been retested by the market.

When such happens, we expect to see a bearish rejection, which will serve as a confirmation for our trade entry.

The market became more visible on the 2hr timeframe, and on this timeframe, I could see that the market has been rejected by this level, after being tested.

With this, my bearish bias of the market got strengthened and I decided to search for a trading confluence using relative strength index indicator.

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CONFLUENCE USING RELATIVE STRENGTH INDEX INDICATOR

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The rsi Indicator is a very important trading tool in the cryptomarket.

The rsi indicator is used to spot oversold and overbought market regions.

And when a market is spotted to be oversold, it is a signal that the market is about to experience a bullish move.

And when a market is spotted to be overbought, it is a signal that the market is about to experience a bearish move.

Applying the rsi to the monthly timeframe, I noticed that the rsi is gradually approaching its 20% line, and when it does so, the market can be said to be oversold.

And an oversold market is one that signals a bulllish trend reversal of the market, that is , the weakness of the bears and strength of the bulls.

And then I continued my analysis on the daily timeframe.

I then continued my analysis by moving to the daily timeframe, and on this timeframe, I can see that the rsi has crossed above its 80% line.

This is an indication that the market is being overbought on this timeframe, and it is expected to see the market experience a bearish move.

And this is in alliance with my analysis using support and resistance strategy.

And moving to the 2hr timeframe with my bearish bias, I decided to enter a sell on the market.

And I proceeded to place my entry on the closest resistance level to the market, and I was able to mark out a low which will act as my take profit region.

All of this can be seen from the screenshot above.

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CONCLUSION

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Avalanche is a very nice crypto project in the cryptospace and its native token is what we know to be avax.

And as seen above, I have shared my analysis on AVAXUSDT, and I intend for my post to be taken as an educational content and not a financial advise.