Avalanche is climbing towards resistance, is a reversal underway?

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• Avalanche continued to trend down on the 1-day price chart.
• The rally could stretch higher to collect liquidity for a turnaround.

Avalanche [AVAX] was in an interesting spot on the daily price chart. The market structure and price action trend were bearish. Still, the outlook for the lower time frame was optimistic. However, demand was unlikely to be strong enough to breach an impending resistance zone.

Read Avalanches [AVAX] Price Forecast 2023-24

Increasing Bitcoin [BTC] prices saw increased demand for the packaged version of BTC on the Avalanche network. The active user base also saw a huge increase on the monthly chart as dApps saw an increase in usage. Interest in NFTs also increased.

The 1-day bearish order block presents a stiff resistance zone for AVAX bulls

Source: AVAX/USDT on TradingView

AVAX market structure was bearish on the 1-day chart. A move past the recent lower high at $15.06 would be necessary to shift the structure to bullish. Even in that scenario, it would highlight bullish intent and not necessarily an uptrend.

As AVAX has formed multiple lower highs and lower lows over the past two months, the price has been in a solid downtrend. In the north, the $13.88-$14.67 area represented a bearish order block.

It was likely that a retest of this zone would trigger a strong bearish reaction. Alternatively, Avalanche token prices may temporarily rise to the $15-$15.1 region to catch breakout bulls sidelined before a reversal takes place.

The RSI flipped the neutral 50 level in support to show bullish momentum, but the OBV failed to climb to the highs seen in late May. This showed that the upward move was not supported by strong demand for the asset.

Downturn in development not yet a cause for concern for investors

Source: Sanitation

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There has been an upward trend in development activity for the past three weeks, but on June 19, it fell sharply. Still, developer activity has a habit of seeing strong fluctuations, but overall the trend is higher in 2023.

However, weighted sentiment was negative behind the token despite increased usage. The avalanche funding rate had dipped deep into bear territory during the plunge to $11. At the time of writing, it was positive again.