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.

As usual, I moved to the weekly timeframe to continue my analysis, and on this timeframe, I could see more candles.

On this timeframe, each candles takes a trading period of 7days to be completely formed which is why there's more candles on this timeframe than on the monthly timeframe.

And looking carefully on this timeframe, 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 there are much sellers than buyers on this level.

I then continued my analysis by moving to the daily timeframe, and on this timeframe I could see the market more clearly.

I could see series of bullish and bearish candles on this timeframe, and there are more candles on this timeframe because the candles on this timeframe is formed within the 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, and the market is expected to be rejected whenever it trades towards this level.

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

And looking carefully, I could see that the market has been on a bearish trend until it traded towards my support level and upon getting to this level, it was rejected by this level, and we can see series of bullish candles in the market.

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

Getting to the 2hr timeframe in search of entry, I could see more noise in the market, I could feel the presence of the buyers and sellers as they struggle to Push the market in their favour.

And then I was able to identify another level that I expect the market to trade towards and this level will be functioning as my take profit level.

And with this, I decided to search for entry 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 market trades below its 20% line.

An oversold market is understood to be a bullish trend reversal of the market, that is, it indicates the weakness of the bears and the strength of the bulls.

Applying the rsi to the daily timeframe, I realised that the market is being overbought, and an overbought market signals a bearish trend reversal.

That is, it is a market condition that shows the weakness of the buyers and strength of the sellers as they are about to drive the market downwards.

I then decided to move to the 2hr timeframe In search of entry.

Getting to the 2hr timeframe with my bullish bias, I then searched for the closest support level so I could join the market from that level.

And then I realised that the market has been rejected from that level but I expect it to be retrace towards this support level again.

Then I placed my entry on this support level 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.