Avalanche AVAX

1. Starting data: hourly candles

Each candle sums up one hour of trading in four prices: open, high, low and close. The portal uses only closed candles, because an open one is still changing and the indicators would jump around within the hour.

2. EMA20 and EMA50: moving averages

What it says: where the price is heading on average. While the faster EMA20 is above the slower EMA50, the direction is up, and while it is below, the direction is down. EMA20 is now above EMA50, so the direction is up.

How it is obtained

EMA is an average that gives more weight to recent prices. It is calculated step by step: a share of the new price is taken, plus the remainder of the previous EMA. That share depends on the period, so a shorter period reacts faster.

k = 2 / (period + 1)
EMA = close × k + previous EMA × (1 − k)

Example on the latest candle

• The close is 8.200.
• EMA20: k = 2 / 21 = 0.0952. 8.200 × 0.0952 + 8.72230 × 0.9048 = 8.67255
• EMA50: k = 2 / 51 = 0.0392. 8.200 × 0.0392 + 8.68080 × 0.9608 = 8.66195

What to watch out for: the average looks backwards and always lags. In a sideways market the EMAs keep crossing, and that does not mean a change of direction.

Try it in the lab

3. Gap between EMA20 and EMA50 0.12 %

What it says: EMA is a moving average that gives more weight to recent prices. EMA20 follows the last 20 hourly candles more quickly, and EMA50 follows the last 50 more slowly. The gap shows how far the short-term price has moved away from the medium-term one. A small gap means the market has no clear direction, so the portal does not talk about a trend then.

How it is obtained

gap = |EMA20 − EMA50| / EMA50 × 100

Example on the latest candle

• Difference: |8.67255 − 8.66195| = 0.01060
• As a percentage of EMA50: 0.01060 / 8.66195 × 100 = 0.12%
• That is below 1.5%, so this condition for a trend is not met.

What values it can take

The percentage on its own has no upper limit and is always positive. The direction is read from which EMA is on top. The ranges are the portal's rule of thumb for hourly candles, not a general rule.

• Below 0.5% nowThe averages are almost stuck together. The market has no direction, and crossovers often mean nothing.
• 0.5 to 1.5%A slight gap. For the portal this is still a sideways market.
• 1.5 to 4%A clear gap. The second condition for a trend is met.
• Above 4%A large gap. The move is strong, but the price is far from the average, so pullbacks are frequent.

What to watch out for: Averages look backwards, so they always lag. A large gap is not a signal that the price will surely return, and a small one is not proof that a calm range will last.

4. RSI (14) 23.8

What it says: RSI (Relative Strength Index) compares the size of gains and losses over the last 14 hourly candles. It shows who has had more momentum lately, buyers or sellers.

How it is obtained

For each candle, the change in the close is examined. Gains and losses are smoothed separately using Wilder's method, and RS is their ratio.

average gain = (previous × 13 + today's gain) / 14
average loss = (previous × 13 + today's loss) / 14
RS = average gain / average loss
RSI = 100 − 100 / (1 + RS)

Example on the latest candle

• Change: 8.200 − 8.540 = -0.340, so the gain is 0.000 and the loss is 0.340.
• Average gain: (0.01805 × 13 + 0.000) / 14 = 0.01676
• Average loss: (0.03162 × 13 + 0.340) / 14 = 0.05365
• RS: 0.01676 / 0.05365 = 0.312
• RSI: 100 − 100 / (1 + 0.312) = 23.8

What values it can take

The value is always between 0 and 100. The midpoint is 50. The thresholds of 30 and 70 are a common convention.

• Below 30 nowOversold zone: losses have strongly prevailed. The price can still keep falling.
• 30 to 50Momentum is weaker, sellers have a slight edge.
• 50 to 70Momentum is stronger, buyers have a slight edge.
• Above 70Overbought zone: gains have strongly prevailed. The price can still keep rising.

What to watch out for: The most common mistake is reading “above 70” as “sell” and “below 30” as “buy”. In a strong trend the RSI can stay in the extreme zone for a long time, and an order against the trend then loses.

Try it in the lab

5. ATR (14) 0.118

What it says: ATR (Average True Range) measures how far the price moves on average within one candle. It says nothing about direction, only about how restless the market is. Here it is the average for one hour. ATR is now 0.118 USDT, which is 1.43% of the current price. In an average hour the price range is about that size.

How it is obtained

First the true range of the candle is determined. The previous close enters the calculation so that the jump between two candles is not lost. ATR is the smoothed average of that range.

true range = the largest of: high − low, |high − previous close|, |low − previous close|
ATR = (previous ATR × 13 + true range) / 14

Example on the latest candle

• High − low: 8.535 − 8.135 = 0.400
• |High − previous close|: |8.535 − 8.540| = 0.005
• |Low − previous close|: |8.135 − 8.540| = 0.405
• The true range is the largest of these: 0.405
• ATR: (0.09642 × 13 + 0.405) / 14 = 0.11847

An example calculation, not a recommendation: a stop 2 ATR below the current price would be at 8.027 USDT. With an account of 10,000 USDT and a risk of 1% (100 USDT), the quantity is 100 / (2 × 0.11847) = about 422.06 AVAX. Fees and slippage are not included.

What values it can take

ATR is in the same unit as the price, so it cannot be compared directly between coins. For comparison, use the percentage of the price. The ranges are the portal's rule of thumb for hourly candles of large coins, not a general rule.

• Below 0.3% of priceA calm market. Small moves, and fees then eat most of the profit.
• 0.3 to 1% of priceModerate volatility.
• 1 to 2% of price nowA lively market. It needs a wider stop and a smaller position.
• Above 2% of priceA stormy market. Stops are easily reached, and slippage grows.

What to watch out for: A high ATR does not mean the price will rise or fall, only that it moves more. ATR is an average of the past, so a sudden move can be many times larger.

6. ADX (14) 20.6

What it says: ADX (Average Directional Index) measures the strength of a move, not its direction. The same ADX of 35 can occur in a strong rise and in a strong fall. +DI shows the strength of upward movement and −DI the strength of downward movement. −DI is stronger now.

How it is obtained

Two consecutive candles are compared. The upward move is how far the new high is above the old one, and the downward move is how far the new low is below the old one. Only the larger of them is counted, and only if it is positive. Both are smoothed and divided by the smoothed true range.

+DI = smoothed upward move / smoothed true range × 100
−DI = smoothed downward move / smoothed true range × 100
DX = |+DI − −DI| / (+DI + −DI) × 100
ADX = (previous ADX × 13 + DX) / 14

Example on the latest candle

• Upward move: 8.535 − 8.720 = -0.185. Downward move: 8.494 − 8.135 = 0.359.
• Only the larger move is counted, and only if it is positive: +DM = 0.000, −DM = 0.359.
• After smoothing over 14 candles: +DI = 10.30, −DI = 45.76.
• DX: |10.30 − 45.76| / (10.30 + 45.76) × 100 = 63.26
• ADX: (17.31 × 13 + 63.26) / 14 = 20.59

What values it can take

The value ranges from 0 to 100, but in practice it rarely climbs above 60.

• Below 20A weak trend or a sideways market. The price has no clear direction.
• 20 to 25 nowA trend may be forming. From 20 upwards the portal treats the first condition for a trend as met.
• 25 to 50A pronounced trend.
• Above 50A very strong move. This is rare and often seen during sharp moves.

What to watch out for: ADX lags because it is an average of an average, so it confirms a trend only once part of the move is already over. On its own it gives no signal to buy or sell.

7. Upper and lower level

What they say: where the price ran into a limit over the last two days. These two prices define scenarios A and B. They are not a target or a prophecy, but points agreed in advance for checking.

How they are obtained

upper level = highest high in the 48 candles before the last closed one
lower level = lowest low in the same 48 candles

Example

• Candles from 03.11. 16:00 to 05.11. 15:00 are examined.
• Highest high: 9.170. Lowest low: 8.282.
• The last candle closed at 8.200. That is below the lower level, so scenario B is confirmed.

What to watch out for: the last candle is deliberately not among those 48. Otherwise every breakout would immediately move its own level and would never be confirmed. Confirmation is the close of the hour, not a brief touch, so the signal arrives with a delay.

8. Market state Sideways

What it says: whether the market should be read as a trend or as movement without direction. This describes the current state and is not a forecast.

How it is obtained

Both conditions must hold. If at least one does not, the state is sideways. Two conditions are required because ADX measures the strength of the move, while the EMA gap shows whether the price has really moved away from the average.

trend = ADX ≥ 20 and gap ≥ 1.5%

Example

• ADX 20.6 is at least 20: yes.
• The gap 0.12% is below 1.5%: no.
• Result: Sideways.

What to watch out for: the thresholds of 20 and 1.5% are this portal's choice, not a law of nature. The state can change as early as the next hour. This is an educational calculation, not a recommendation to buy or sell, and the indicators describe the past.