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.

As usual, I visited the weekly timeframe for more market information, and as expected I could see more market activities, as each candle here was formed within the time period of 1week.

On this timeframe, I was able to detect a key level, and this level will function as a resistance level to the market price, it is a level where there are more sellers than buyers in the market.

And the impact of the sellers are expected to be felt when the market approaches this level.

To continue my analysis, I decided to pay the daily timeframe a visit, and on this timeframe, I noticed that there are more candlestick than on the weekly timeframe.

Amidst this noise in the market, I was able to spot out another effective level, and this level will be functioning as a support level to the market price.

And on this level, there tend to be more buyers than sellers, and when the market trades towards this level, we can expect to see a bullish rejection candle, which indicates the presence of buyers.

I then continued my analysis on the 4hr timeframe, and on this timeframe, I could see series of noise in the market.

I could see the struggle between buyers and sellers as they show their strength in the market, and I could see that the bears are leading over the bulls

And looking carefully on this timeframe, I could detect another key level and this level is likely to hold the market as a resistance level.

However, this level has been respected previously by market price as a resistance level and we expect it to get respected again.

I then decided to check on the 2hr timeframe, as it is on the 2hr timeframe that I take my entry into the market.

On this timeframe, I could see that the market has traded towards the support level where the buying pressure is stronger, and as such I expect to see a bullish trend reversal of the market.

And before entering the market, I decided to search for confluence using the rsi 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.

I then decided to add the rsi to the monthly timeframe, and on this timeframe, I noticed that the rsi has gotten to its 20% level.

And thus, the market can be said to be oversold, and an oversold market is understood to be a bullish trend reversal signal.

It is a market condition, showing the change in market strength from the bears to the bulls, that is we expect to see a bullish move on the market.

Then applying the rsi on the daily timeframe, I could see that the rsi has crossed below its 20% line, and this is an indication that we should expect a bullish trend reversal on the market.

This Market can be said to be oversold, and as explained earlier, it shows that's the sellers are becoming weak and the buyers are gaining strength at that period in time.

With my bullish bias of the market I decided to move to the 2hr timeframe.

Remember I earlier said that my entry are usually taken on the 2hr timeframe, and as such, I decided to take a buy order on the market.

I placed my entry on the closest support level to the market and my take profit was placed on the market closest resistance level, just as seen 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.