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
ANALYSIS USING SUPPORT AND RESISTANCE STRATEGY
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.
And moving to the weekly timeframe I could see the market more clearly, I could see more candles than on the monthly timeframe and this is because each candle on this timeframe is being formed within the trading period of 7days.
And looking carefully, I was able to identify a key level and this level is functioning as a resistance level to the market price, and the market is expected to be rejected whenever it trades towards this level as it is believed that there are more sellers than buyers on this level.
And from the above screenshot, we can see that the market has severally respected this level by showing significant reactions when it trades towards it.
And moving to the daily timeframe, I could see the market more clearly, I could see more candles than on the weekly timeframe, and on this timeframe, each candle 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 price, and the market is expected to be rejected when it trades towards this level.
And we can see the validity of this level as the market has been unable to break below it but rather respects it whenever it trades towards it.
On the 4hr timeframe, I could see the formation of a several bullish and bearish candles which shows the presence of the buyers and sellers in the market.
And from the screenshot above, I can see that the sellers are in control of the market as it kept forming lower lows and lower highs until it traded towards its support level.
And getting to the 2hr timeframe, I could see the market more clearly and I could see the market trading towards its support level.
And when it trades towards this level, I expect to see a bullish rejection on the market, and then I decided to search for confluence using the relative strength index indicator.
CONFLUENCE USING RELATIVE STRENGTH INDEX INDICATOR
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 understood to be a bullish trend reversal of the market.
An oversold market is one that can be detected when the rsi crosses below its 20% line, and this shows the change of market strength from the bears to the bulls.
And moving to the daily timeframe, I could see that the market is being oversold, and as explained earlier, an oversold market is detected when the rsi crosses below its 20% line.
It is a market condition that shows the strength of the bulls over the bears and as such, we can expect to see the formation of bullish candles.
And moving to the 2hr timeframe with my bullish bias, I decided to place my buy entry on the closest support level to the price chart and my take profit position was placed on the closest resistance level to the market.
CONCLUSION
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.
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