{"id":327625,"date":"2021-08-19T20:01:21","date_gmt":"2021-08-19T17:01:21","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/avalanche-avax-in-overbought-zone-after-100-gains-in-a-week-correction-ahead\/"},"modified":"2021-08-19T20:01:21","modified_gmt":"2021-08-19T17:01:21","slug":"avalanche-avax-in-overbought-zone-after-100-gains-in-a-week-correction-ahead","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/avalanche-avax-in-overbought-zone-after-100-gains-in-a-week-correction-ahead\/","title":{"rendered":"# Avalanche (AVAX) in &#8216;overbought&#8217; zone after 100% gains in a week \u2014 Correction ahead?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36547269b26\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36547269b26\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/avalanche-avax-in-overbought-zone-after-100-gains-in-a-week-correction-ahead\/#Overvaluation_risks\" >Overvaluation risks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/avalanche-avax-in-overbought-zone-after-100-gains-in-a-week-correction-ahead\/#Fundamentals\" >Fundamentals<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Avalanche (AVAX) in &#8216;overbought&#8217; zone after 100% gains in a week \u2014 Correction ahead? <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-128018ef>Avalanche blockchain platform&#8217;s native asset AVAX fell on Thursday as traders decided to secure their profits from its 100% upside move.<\/p>\n<p>The AVAX\/USD exchange rate plunged more than 16% after hitting a three-month high of $36.64, putting a brake on a seven-day upside boom that saw its price rising by 111%. It <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears that traders felt uneasy about entering AVAX markets near $36 because of its historical reference as a sell-off level (it capped AVAX&#8217;s recovery attempts in March-May 2021).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Overvaluation_risks\"><\/span>Overvaluation risks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>AVAX also dropped on interim overvaluation fears. The Avalanche token&#8217;s daily <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.investopedia.com\/terms\/r\/rsi.asp\">relative strength index<\/a> (RSI) crossed above 70 during its upside boom. In detail, markets consider an RSI reading above 70 as overbought for the underlying asset, noting that the price has climbed excessively higher and, therefore, should undergo a correction.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-08\/51544996-21c8-4e4a-9c8b-e40e9838cfa6.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Avalanche (AVAX\/USD) daily price chart. Source: TradingView.com<\/em><\/figcaption><\/figure>\n<p>More evidence for AVAX&#8217;s interim overvaluation appeared out of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.fidelity.com\/learning-center\/trading-investing\/technical-analysis\/technical-indicator-guide\/bollinger-bands\">Bollinger Bands<\/a>. The indicator consists of a middle band (a 20-period simple moving average) and two outer bands set at two standard deviations below and above the middle band.<\/p>\n<p>When the price overreaches its valuation in the short term, it tends to jump above the upper band. Similarly, slipping below the lower band suggests that the asset is trading below its current valuation. AVAX crossed above the upper Bollinger Band following the latest price rally.<\/p>\n<p>The two indicators were instrumental recently in predicting AVAX price corrections. For instance, during the February 2021 rally, wherein the Avalanche token surged over 500% in just two weeks, its RSI and Bollinger Bands both alerted about its excessive interim valuation.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-08\/dfac577c-6066-481b-bb7e-913cd6c225dd.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\"><em>Avalanche momentum indicators alert overbought risks. Source: TradingView.com<\/em><\/figcaption><\/figure>\n<p>The price wiped 65% of its gains in the next three weeks to neutralize its overbought status. Its next interim support came at the 23.6% Fib line ($22.29) of the Fibonacci retracement graph drawn between the $63.3 swing high and $9.62 swing low.<\/p>\n<p>The same 23.6% Fib level now serves as the next line of support should the AVAX price corrects owing to its RSI and Bollinger Bands alerts.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24AVAX&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$AVAX<\/a> Update <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/ZUZ7NlamMA\">https:\/\/t.co\/ZUZ7NlamMA<\/a> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/3Y1qTNfySs\">pic.twitter.com\/3Y1qTNfySs<\/a><\/p>\n<p>\u2014 Rager  (@Rager) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Rager\/status\/1428374008584712194?ref_src=twsrc%5Etfw\">August 19, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Fundamentals\"><\/span>Fundamentals<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The latest bout of Avalanche price boom appeared in the wake of the launch of its $180 million\u00a0\u201cliquidity mining incentive program\u201d to bring decentralized finance (DeFi) services to its blockchain platform, including lending platform Aave and automated market protocol Curve Finance.<\/p>\n<p><strong><em>Related:\u00a0Avalanche Rush to give out more than 180M in DeFi incentives<\/em><\/strong><\/p>\n<p>AVAX&#8217;s bounce also appeared as a rally in its top rival Ethereum&#8217;s market flattened out. This is because traders tend to rotate capital out of overvalued markets to bet on assets they deem undervalued.<\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/avalanche-avax-in-overbought-zone-after-100-gains-in-a-week-correction-ahead\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Avalanche (AVAX) in &#8216;overbought&#8217; zone after 100% gains in a week \u2014 Correction ahead? &#8221; Avalanche blockchain platform&#8217;s native asset AVAX fell on Thursday as traders decided to secure their profits from its 100% upside move. The AVAX\/USD exchange rate plunged more than 16% after hitting a three-month high of $36.64, putting a brake&#8230;<\/p>\n","protected":false},"author":1,"featured_media":327626,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDgvOWNjODkyYWQtNGVhMS00MmMwLWFiODEtNGZlNzVkM2I3ZWE1LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,88119,79806,74939,75150,78261,73785],"class_list":["post-327625","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-altcoin-watch","tag-analysis","tag-market-analysis","tag-market-update","tag-tech-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/327625","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=327625"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/327625\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/327626"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=327625"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=327625"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=327625"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}