Axelar [AXL] saw a remarkable 1,200% increase in daily trading volume and had rallied 19.8% on Sunday, the 25th of January.
The recent Bitcoin [BTC] bearish hiccup that sent it below $88k affected the wider market, including AXL’s lower timeframe momentum.
Source: AXL/USDT on TradingView
On the 1-day chart, the structure was bearish after the drop on the 20th of January. That move below $0.066 confirmed a bearish continuation.
During the recent days’ rally up to $0.083, Axelar was unable to close a daily trading session above the key overhead supply zone.
This rejection might be temporary.
The OBV has made new highs, higher even than the mid-December ones. The 1-day RSI has also picked up and looks to stay above the neutral 50 mark.
Traders and investors have reason to be cautiously optimistic about a recovery.
However, for now, the bearish bias must remain in place on the higher timeframes. The moving averages did not see a crossover yet, and the bearish structure remained unbroken.
The bearish argument for AXL
Source: AXL/USDT on TradingView
Based on the recent lower timeframe swing move higher, a set of Fibonacci retracement levels was plotted. At the time of writing, the price threatened to fall below the 78.6% retracement level at $0.072.
The RSI has slipped below neutral 50 on the hourly chart, and AXL was trading below the 50-period moving average.
Taken together, it could be the beginning of a bearish spell.
Traders’ call to action- Stay sidelined
The huge Open Interest increase and swift weekend gains might not be sustainable. A deep market retracement and some consolidation might be necessary before bulls gather the steam for their next attempt.
This next attempt could be more successful, especially if Bitcoin does not sink far below $84k.
Over the next week or two, AXL traders can wait for a consolidation around $0.065-$0.072 and a gradual recovery to look to buy.
A price drop below $0.065 would be a warning of a bearish continuation.
Final Thoughts
- The Axelar short-term price action had been bullish over the weekend, but the token experienced a sizeable pullback.
- The momentum for the coming days could be bearish, and swing traders looking to go long would want to see a positive reaction at $0.072.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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