The value of Travala (AVA) has surged 300% recently, after Binance CEO CZ revealed that Binance had invested in the platform early on. This announcement, along with the company's report of an annual revenue of 100 million USD, has sparked strong market interest in AVA.
However, as momentum indicators show signs of cooling, the asset has entered a decisive phase, facing a confrontation between the opportunity for continued growth and the risk of correction.
AVA Is Currently In The Neutral Zone
The Relative Strength Index (RSI) of AVA has recently risen to 96, maintaining above 70 from December 12 to December 13, indicating overbought conditions due to strong upward momentum. Currently, the RSI has dropped to 47.8, reflecting a significant decrease in buying pressure.
RSI, a momentum indicator measuring price changes on a scale from 0 to 100, indicates overbought conditions above 70 and oversold conditions below 30. AVA's shift from the overbought zone to a neutral level indicates a change in market sentiment.
The RSI of AVA. Source: TradingView
With the RSI at 47.8, the price of AVA is currently in a neutral zone, indicating that the previous increase has eased and the asset is no longer overbought or oversold. The drop from 96 emphasizes a loss of momentum, implying that the price may stabilize or face further consolidation.
Although the current RSI leaves room for a new upward trend, traders should also be cautious of potential downside risks if AVA's bullish momentum continues to weaken.
The Current Trend of Travala Is Losing Strength
The Average Directional Index (ADX) of Travala is currently at 39.5, down from 57 just three days ago. ADX measures the strength of a trend, with values above 25 indicating a strong trend and below 20 suggesting a weak or directionless market.
Although the ADX at 39.5 still reflects a strong trend, the notable decline from a recent high signals a weakening momentum, increasing the likelihood of a shift in the market ahead.
The ADX of AVA. Source: TradingView
Despite the ADX decreasing, AVA's lines still show an upward trend, indicating that the bullish trend remains intact. However, the drop in ADX suggests that it may be challenging to see a new strong bullish trend emerge as the trend strength gradually weakens.
Traders should exercise caution, as a weakening ADX may signal consolidation or a potential reversal in price action if buying pressure continues to wane.
AVA Price Forecast: Will the Price Reach 3.5 USD Before Christmas?
The price analysis chart for AVA shows that short-term EMA lines are still above long-term lines, maintaining a bullish layout. However, the downward slope of the shortest EMA line suggests that the upward trend may be losing strength.
If the bearish momentum continues, the price of AVA may test a strong support level at 1.56 USD. If this level does not hold, the price could drop further, potentially falling nearly 50% to 0.81 USD or even 0.62 USD.
AVA Price Analysis. Source: TradingView
Conversely, if the upward trend regains momentum, the price of AVA may recover and challenge the resistance level of 3.38 USD, with the potential to reach 3.50 USD next, continuing to rank among the best-performing coins over the past week.
The EMA lines emphasize a critical moment for AVA, and the next move may depend on whether the price recovery can overcome the current weakening trend signals.