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.

And then I moved to the weekly timeframe to continue my analysis, and on this timeframe, I could see the market more clearly, I could see the formation of several candles as each candle takes a trading period of 7days to be completely formed.

And looking at the market carefully, I was able to identify a key level and this level is functioning as a resistance level to the price chart, and the market is expected to be rejected whenever it trades towards this level.

And from the screenshot above, we can see the validity of this level as the market has made several touches on this level and has been unable to break above this level.

And then I continued my analysis my moving to the daily timeframe, and on this timeframe, I could see the market more clearly, I could see the formation of several bullish and bearish candles which shows the presence of buyers and sellers in the market.

And looking carefully, I was able to identify another key level and this level is functioning as a support level to the price chart , and the market is expected to be rejected whenever it trades towards this level.

And from the above screenshot, we can see that the market has made several touches on this support level, which shows the validity of this level.

And moving to the 4hr timeframe, I could see the market more clearly, and I could see noise in the market, as the buyers and sellers are struggling to drive the market to their preferred direction.

And from the above screenshot, we can see that the market has been in a bearish move forming lower lows and lower highs until it trades towards its support level.

And from the above screenshot, we can see that the market began create new highs which shows it's rejection from this level.

And with my bullish bias of the market, I moved to the 2hr timeframe, and then I was able to identify a bullish order block in the market.

And it is from this orderblock that I intend to place my entry but before then, 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 is understood to be a bullish trend reversal of the market.

An oversold market is detected when the rsi crosses below it's 20% line, and then this happens, we can expect to see a change in market strength from the sellers to the buyers.

And moving to the daily timeframe, I could see the market more clearly, and I realised that the market is being overbought, and an overbought market is signaled when the rsi crosses above its 80% line.

And an overbought market shows the strength of the sellers over the buyers in the market, and then we can expect to see the formation of several bearish candles.

And getting to the 2hr timeframe with my bullish bias of the market, I decided to place my entry on the bullish order block I identified.

And then my take profit was placed on the closest resistance level to the price chart.

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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.