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, I could see more candlestick than on the monthly timeframe.

And on this timeframe, I was able to spot a key level, and this level will be functioning as a resistance level to the market price.

On this level, it is believed that there are more sellers than buyers, and as such, we expect to see a bearish trend reversal on the market when it trades towards this level.

To get more market details, I moved to the daily timeframe, and as expected, I could see more market activities.

On this timeframe I could feel the presence of buyers and sellers as they try to drive the price to their preferred direction.

And on the daily timeframe, I could see the market reacting off a resistance level, as the buyers could not push the market higher as a result of the selling pressure.

And it is expected that the market gets rejected whenever it trades towards this level, as this level is a resistance level.

On the 4hr timeframe, I could see how noisy the market is, I could see the the struggle between the buyers and sellers.

Also on this timeframe, I could notice a unique level which the market has made several touches on, and was unable to break below.

And eventually the market broke below this level, which inturn made this level to be a support turn resistance level.

And after the market broke below this level, we expect to see a bullish retracement of the market to retest the validity of this broken level.

Getting to the 2hr timeframe where I take my entry into the market, I noticed that the market has retested this broken level.

And when this happens, I expect to see a the formation of bearish candles which indicates the bearish trend continuation of the market.

And before taking my entry into the market, I decided to add rsi 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.

Applying the rsi to the monthly timeframe, I noticed that the market is about to be oversold, as it's rsi is gradually approaching its 20% line.

When this happens, we can say the market is being oversold, and this is a bullish trend reversal signal, as the buyers are about to take control of the market.

Then I decided to continue my analysis on the daily timeframe.

Getting to the daily timeframe, I could see that the rsi has crossed above its 80% line, and with this, the market can be said to be overbought.

An overbought market is one that signals a bearish trend reversal of the market, that is, a market condition where the sellers are gaining strength over the buyers.

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

And getting to the 2hr timeframe, my bias of the market is bearish already.

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