AVAX · 1H · DOWNTREND
Price launched from the 6.30 base to the 8.30+ spike high visible on this chart, then reversed hard — and the previous short read hit Target 1 at 7.23 cleanly. Now price is continuing lower, printing a sequence of lower highs from 8.30 through 7.75, 7.50, and now sitting at 7.25, right on top of the dense liquidation cluster at 7.23. The structure is unambiguously bearish on this timeframe — every rally attempt has been sold, and the current level is the last notable cluster before open air down to 6.66 and then 6.43.
The problem with chasing short here is that I'm sitting directly on a dense liquidation cluster at 7.23. That cluster is a magnet but also a potential bounce point — a stop hunt through it could spike price briefly before the next leg lower. I'm not shorting into that cluster from above; I'm waiting for price to either punch through it with a clean close below, or bounce into the next resistance level and set up a better-defined rejection entry.
SHORT SCENARIO
Confirmation
7.23
Closing below 7.23 on the 1H confirms the cluster has been absorbed and bearish continuation is underway — that close prints a new lower low in this sequence and opens the move toward 6.66.
Invalidation
7.45
Structure invalidated on a close above 7.45 — that reclaims the prior consolidation zone and breaks the lower-high sequence.
Target 1
6.66
Dense liquidation cluster — natural next magnet below, sitting just above the prior congestion area.
Target 2
6.43
Dense liquidation cluster — where the bulk of leveraged long stops are stacked from the breakout base; this is where the move most likely exhausts.
Risk/Reward
(7.23 - 6.66) / (7.45 - 7.23) = 0.57 / 0.22 = 2.6:1
Resistance: 7.45 / 7.80
Support: 7.23 / 6.66
This is not financial advice. Content is AI-generated.