AVAX, Avalanche’s native token, appears bearish and poised for a price drop as it has formed a bearish price action pattern on the daily time frame. However, the current market sentiment is quite unpredictable, with some cryptocurrencies witnessing price increases while others experience notable price declines.
AVAX technical analysis and price action
Amid this, AVAX has reached a crucial support level at USD 35 and is struggling to hold this level. Since December 2024, the altcoin has reached this level several times, and each time witnessed a price increase. However, current market sentiment seems unfavorable for AVAX and indicates that it may fail to maintain this level.
Based on recent price action and historical momentum, if AVAX fails to hold this level and close a daily candle below the $34.50 level, it could fall 14% to reach the $29 level in the coming days reaches.
In addition to this bearish price action, AVAX’s Relative Strength Index (RSI) is currently near oversold territory, indicating a potential price reversal. However, this reversal seems difficult for the altcoin.
Bearish outlook for traders
Looking at market sentiment, traders are betting heavily on short positions, as evidenced by the on-chain analytics firm Mint glass. At the time of writing, the AVAX long/short ratio stands at 0.85, indicating bearish sentiment among traders. Data also shows that 54.5% of the top AVAX traders currently hold short positions, while 45.5% hold long positions.
Despite the bearish sentiment and traders’ strong bets on short positions, long-term holders have shown strong interest and confidence in the altcoin.
Long-term holders have a bullish outlook
Data from the spot inflows/outflows metric shows that the exchanges witnessed AVAX outflows worth $5.90 million in the last 24 hours. This data points to the long-term sentiment of investors who appear to be betting on AVAX despite the price struggling to gain momentum.
AVAX is currently trading around $34.96 and has witnessed a decline of 6.35% in the last 24 hours. During the same period, trading volume increased by 30%, indicating increasing participation from traders and investors compared to the day before.
Credit : coinpedia.org
