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 and I could see more candles as each candle on this timeframe takes a 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 whenever it trades towards this level.

And from the above screenshot, we can see that the most recent bearish leg is as a result of rejection from this level.

And moving to the daily timeframe, I could see lots of market activities as each candle here is being formed after a trading period of 24hrs.

And looking carefully, I was able to identify another key level and this level is functioning as a support level to the market, that is, there are lots of buyers on this level.

And whenever the market trades towards this level, we can expect to see a bullish rejection, as the buying pressure outweighs the selling pressure.

And moving to the 4hr timeframe, I could see lots of noise in the market, I could feel the presence of the buyers and sellers but the selling pressure has been higher than buying pressure.

And looking carefully, I noticed that the buyers began to gain strength as the market traded towards this support level, and I could see the market breaking above a key level, which is an indication that the buyers are about to control the market.

I then decided to move to the 2hr timeframe in search of entry into the market.

And getting to the 2hr timeframe, I could see lots of bullish candles which is indicating the strength of the buyers in the market.

And this gave me a bullish bias towards the market and before entering the market, 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 can be detected when the rsi crosses below its 20% line.

An oversold market is one that signals a bulllish trend reversal of the market, that is, a change in market strength from the sellers to the buyers.

And then I decided to continue my analysis on the daily timeframe

I then continued my analysis on the daily timeframe and I noticed that the market is being overbought as the rsi has crossed above its 80% line.

An overbought market is the opposite of an oversold market and it signals a bearish trend reversal of the market, and as such, I moved to the 2hr timeframe in search of entry into the market.

And getting to the 2hr timeframe, my bullish bias of the market has been established and as such, I placed my entry on the closest support level to the market and my take profit was placed on the market closest resistance level.

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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.