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.

I then continued my analysis by moving to the weekly timeframe and on this timeframe, I could see the market more clearly, I could see the formation of more candles as each candle on this timeframe takes a trading period of 7days to be completely formed.

And looking carefully, I was able to identify a key level and this level is functioning as a resistance level to the market, and the market is expected to be rejected when it trades towards this level, as the selling pressure on this level is very high.

And from the above screenshot, we can see that the market always react to this particular level whenever it trades towards it, either as a resistance level or a support level.

Moving to the daily timeframe, I could see the market more clearly, I could see the formation of several candles, both bullish and bearish which shows the presence of the buyers and sellers in the market.

And looking at the market more carefully, I was able to identify another key level and this level is functioning as a support level to the price chart, as the market is expected to be rejected whenever it trades towards this level.

And from the screenshot above, we can see the validity of this level as the market made several touches on it and was unable to break below, this shows that this level is a valid level.

And moving to the 4hr timeframe, I could see lots of noise in the market, as the buyers and sellers struggle to drive the market to their preferred direction.

And looking carefully, the market was formerly in a bearish trend which shows the dominance of the sellers as the market kept forming new lows.

And when it traded towards its support level, we can see that the market failed to form new lows but rather it formed new highs in the market.

And I decided to move to the 2hr timeframe with my bullish bias of the market, and I could see that the market is trading towards its support level.

And when the market trades towards this level, I can expect to take my buy entry from this level and before then, I decided to search for confluence using the 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 could see that the market is being oversold, and an oversold market is detected when the rsi crosses below its 20% line.

An oversold market signals a bullish trend reversal of the market, that is, a change in market strength from the sellers to the buyers, which is usually accompanied by the formation of bullish candles.

And moving to the daily timeframe, I could see that the market is also being oversold, and as explained earlier, an oversold market signals a bulllish trend reversal.

It is a market condition that shows the weakness of the bears in the market and the strength of the bulls, and with this, I decided to move to the 2hr timeframe in search of entry into the market.

And with my bullish bias of the market, I decided to search for bullish entry into the market, and looking carefully, I could see that the market was about to trade into a support level.

And then I decided to place my entry on this support level and my take profit was placed on the closest resistance level to the price chart.

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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.