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 bullish.

I then continued my analysis by moving to the weekly timeframe and on this timeframe there are more candlesticks.

And this is because each candle is being formed within the time period of 1week.

Also on this timeframe, I was able to identify a key resistance level, and the market is expected to be rejected to the downside whenever it trades to this resistance level.

Continuing to the daily timeframe, I could see more market activities.

I could see more candlestick as the buyers and sellers struggle to drive price to their preferred direction.

Looking carefully, I was able to spot a key level and this level is functioning as a support level to the market price.

Also this level can be said to be a valid level as it has severally been respected by the market and it is expected to be respected by the market again.

Getting to the 4h timeframe, I could see series of market manipulation as the market is moving in both directions.

Looking carefully at this timeframe, I was able to detect another level which I indicated with an horizontal line.

And from the screenshot above, we can see that the market has broken above this resistance level and we expect to see a retrace to the broken level.

And then we can expect a bullish rejection from this level.

I then continued by moving to the 2hr timeframe as it is on this timeframe that I search for entry into the market.

On this timeframe, I could see the formation of bearish rejection candles as expected.

I will then patiently wait for the market to get to this broken level before I will place a buy order.

And before then, I decided to apply the relative strength index indicator as a confluence to my trade.

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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.

Adding the rsi to the monthly timeframe, I noticed that the rsi is gradually approaching its 80% line and this is an indication that the market is being overbought.

An overbought market region is known to be a market that is expected to be sold.

It is a market condition signifying a change of power from the buyers to the sellers on the market.

And in a simple word, we can say that an overbought market is a bearish trend reversal market that we expect to experience a bearish move.

I then continued my analysis by moving to the daily timeframe.

On this timeframe, we can see that the market is being overbought, and as I have explained earlier, an overbought market is one signaling a bearish trend reversal.

This implies that we expect the market to experience a bearish move momentarily, then I decided to move to the 2hr timeframe in search of entry into the market.

Getting to the 2hr timeframe, i noticed that the market was being overbought.

And then I placed my entry on the closest support level to the market level and my take profit was placed on the closest resistance level.

And this can be confirmed from the above screenshot.

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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.