AVAX → Avalanche Pullback Complete? Long to $50 or Higher!
Updated
AVAX ran three pushes up in a bull channel just shy of the 2022 Resistance area topping out at $50. That was followed by a pullback and a strong bull signal. Is it time to long?
How do we trade this? 🤔
A long entry is close to being justified! Here's what we have in favor of the long bias; Three pushes up in a bull channel ending at $50 (psychological number because it's even) just below the 2022 resistance price of $53.25, followed by three pushes down in a micro-bear channel, the final push of the bear channel ended in a strong bull signal bar, and we have a good bull bar close on the third after the signal bar.
What we need now is a strong bill close above the 30EMA. A desirable data point would be a re-test of the micro-bear channel resistance as support to add probability to our long. However, I do not believe this is required to justify a long entry.
I believe we need to be conservative longing at this stage in the crypto market, which is why I only advocate for a 1:1 scalp at a lower than maximum position size allowed for your trading strategy. I think Bitcoin and Ethereum have a larger pullback on the horizon, but do believe the market will come up a bit before it goes down.
💡 Trade Idea 💡
Long Entry: $34.90
🟥 Stop Loss: $23.90
✅ Take Profit: $45.90
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Three pushes up in a bull channel ending at 2022 Resistance.
2. Micro Bear Channel forms with three pushes down.
3. Strong bull signal buy bar on the third push.
4. Wait for a close above the Daily 30EMA to enter a long position.
5. RSI at 46.00 and above the Moving Average, supports long bias.
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
How do we trade this? 🤔
A long entry is close to being justified! Here's what we have in favor of the long bias; Three pushes up in a bull channel ending at $50 (psychological number because it's even) just below the 2022 resistance price of $53.25, followed by three pushes down in a micro-bear channel, the final push of the bear channel ended in a strong bull signal bar, and we have a good bull bar close on the third after the signal bar.
What we need now is a strong bill close above the 30EMA. A desirable data point would be a re-test of the micro-bear channel resistance as support to add probability to our long. However, I do not believe this is required to justify a long entry.
I believe we need to be conservative longing at this stage in the crypto market, which is why I only advocate for a 1:1 scalp at a lower than maximum position size allowed for your trading strategy. I think Bitcoin and Ethereum have a larger pullback on the horizon, but do believe the market will come up a bit before it goes down.
💡 Trade Idea 💡
Long Entry: $34.90
🟥 Stop Loss: $23.90
✅ Take Profit: $45.90
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Three pushes up in a bull channel ending at 2022 Resistance.
2. Micro Bear Channel forms with three pushes down.
3. Strong bull signal buy bar on the third push.
4. Wait for a close above the Daily 30EMA to enter a long position.
5. RSI at 46.00 and above the Moving Average, supports long bias.
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and Follow to learn more about:
1. Reading Price Action
2. Chart Analysis
3. Trade Management
4. Trading Psychology
Note
Zooming into the 4HR chart, AVAX is attempting to establish support on the 4HR 200EMA. Is we get a strong bull close above support and outside of the micro-bear channel resistance line, it's reasonable to enter the proposed long position.
Note
AVAX ended up finding support on top of the Micro-Bear Channel Support at the Daily 30EMA. The price rallied to $43.50 before falling back down to $35. It's reasonable to remain in a long if you entered near $35 after support was established at the 30EMA.
-Joe Dean
Trader Engineering Course
**Available Now at TraderEngineering.com**
Trader Engineering Course
**Available Now at TraderEngineering.com**
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