AVAX/USDT Technical Breakdown: Oversold Conditions at Key Support – Reversal or Continuation?
AVAX/USDT is currently trading at $8.56, down -3.39% in the last 24 hours, with the price testing critical lower levels after breaking below recent supports.
Key observations from the chart:
Supertrend (10,3): Flipped bearish, currently at ~$8.87 (acting as dynamic resistance). The price has been hugging the lower band, signaling strong downward momentum since the rejection from ~$9.19.
Recent Price Action: Sharp downside candles with increased volume on the drop (24h Vol ~2.58M AVAX), forming lower lows and lower highs on the 1D/4H timeframe. The candle wicked down to ~$8.53, close to the 24h low.
RSI(14): Sitting at 33.62, deep in oversold territory (below 40 and approaching 30). This level has historically preceded short-term relief bounces in AVAX during similar corrections, especially when combined with exhaustion signals.
MACD: Bearish crossover intact (DIF: -0.07, DEA: -0.05, MACD: -0.01), histogram negative and contracting slightly — momentum is weakening, which could hint at a potential divergence if price stabilizes.
Volume Profile: Recent volume bars show spikes on red candles, but the MA(5) and MA(10) on volume are trending lower, indicating fading selling pressure at these levels.
Support/Resistance: Immediate support zone at $8.49–$8.53 (recent low + psychological level). A hold here could trigger a bounce toward $8.79–$8.93 (previous candle bodies + Supertrend). Breakdown below $8.49 opens the door to $8.00–$7.80 (next major support from broader structure).
Overall Bias: Short-term bearish pressure remains dominant with the Supertrend sell signal and price below key MAs, but RSI oversold + MACD flattening suggest the aggressive downside may be nearing exhaustion. This is a classic "wait for confirmation" setup.
Traders watching for:
Bullish reversal: RSI reclaim above 40 + MACD histogram positive flip + close above Supertrend.
Bearish continuation: Sustained break below $8.49 with volume pickup.