AVAX, the native token of Avalanche, appears to be bearish and is likely to experience a price decline due to the formation of a bearish price action pattern on the daily time frame. However, the current market sentiment is volatile, with some cryptocurrencies seeing price surges while others facing significant price drops.
AVAX Technical Analysis and Price Action
Despite this uncertainty, AVAX has reached a critical support level of $35 and is struggling to maintain it. Since December 2024, the altcoin has tested this level multiple times, each time resulting in a price surge. Nevertheless, the prevailing market sentiment suggests that AVAX may struggle to hold this level.
Based on recent price action and historical momentum, a failure to hold the $34.50 level and a daily candle closing below it could lead to a 14% drop in AVAX’s price, potentially reaching the $29 level in the near future.
Despite the bearish price action, AVAX’s Relative Strength Index (RSI) is currently hovering near the oversold territory, suggesting a potential price reversal. However, achieving this reversal may prove challenging for the altcoin.
Traders’ Bearish Outlook
Market sentiment indicates that traders are heavily favoring short positions, as reported by the on-chain analytics firm Coinglass. The current AVAX long/short ratio stands at 0.85, reflecting a bearish sentiment among traders. Data shows that 54.5% of top AVAX traders are currently holding short positions, while 45.5% are in long positions.
Despite the prevailing bearish sentiment and traders’ strong inclination towards short positions, long-term holders are demonstrating confidence and interest in the altcoin.
Long-Term Holders Bullish Outlook
According to spot inflow/outflow metrics, exchanges have recorded an outflow of AVAX worth $5.90 million in the last 24 hours. This data suggests a positive long-term sentiment from investors who are seemingly optimistic about AVAX, despite its current struggles in gaining momentum.
AVAX is currently priced around $34.96 and has experienced a 6.35% decline in the past 24 hours. However, trading volume has increased by 30% during the same period, indicating growing participation from traders and investors compared to the previous day.