AVAX at Risk of Further Drops as Bulls Fail to Defend 61.8% Fib Level

• AVAX has come under selling pressure due to the faltering price action of Bitcoin.
• Bulls are looking to rebound, taking advantage of the easing of the retracement at the 61.8% Fib level.
• The inability of bulls to defend this level could lead to a drop to the 78.6% Fib level, which may give better rallying chances for bulls.

AVAX Under Selling Pressure Amidst Bitcoin Price Action

AVAX has been feeling the pressure from a bearish market structure after gaining 29% in July and breaking its lower low. However, with Bitcoin continuing to remain below $29k, further dips in AVAX have become more likely.

Bulls Look To Rebound At Key Fib Level

A gentle bounce off the 61.8% Fib level ($12.30) hints at some buying power available for bulls if they can seize the opportunity and rebound from this key support level. The 38.2% Fib level ($13.72) is an immediate target they can aim for but it will depend on whether or not BTC reclaims its $29k high point first.

Weak Bullish Conviction Indicated By On-Chart Indicators

The Relative Strength Index (RSI) dropped below neutral 50 on 21 July, indicating sellers had taken control of AVAX’s price movement while capital inflows stagnated as highlighted by Chaikin Money Flow hovering near zero mark. This further weakens any bullish conviction that may be present in current market conditions..

Open Interest Decline Hints At Discouraged Buyers

Data from Coinalyze showed that Open Interest (OI) has been steadily declining since 20 July, suggesting liquidation by discouraged buyers who have lost faith in their positions amidst extended price retracements.

Conclusion

Overall sentiment remains bearish for AVAX due to dipping BTC and weakening bullish conviction indicated by on-chart indicators along with a decline in OI hinting at demoralized buyers not willing to hold their positions anymore amidst extended price retracements . Bulls will need strong support from Bitcoin if they are to take advantage of potential rebounds off key Fib levels such as 61.8%.