Avalanche [AVAX] dipped 9.50% on the 19th of June. This bearish outlook appears to be driven by ongoing geopolitical tensions, the broader market trend, and the breakdown of a major support level.
At press time, AVAX tanked 9.50% over the past 24 hours and was trading at $6.07. Despite the sharp price decline, the asset’s trading volume recorded a sudden spike, indicating strong participation from market participants.
This surge in activity suggests that traders are actively following the current trend, further reinforcing AVAX’s bearish momentum.
The decline was likely influenced by the postponement of U.S.-Iran talks following fresh attacks in Lebanon, which turned the crypto market down 2.66%.
AVAX chart signals more pain ahead
According to TradingView’s daily chart, today’s 9.50% decline has extended AVAX’s bearish trend for a third consecutive day. In fact, this drop triggered a breakdown below the key $6.24 support level, which had acted as a major floor since the 6th of June.
Besides this, AVAX’s broader trend appears bearish due to the persistent breakdown of key support levels at $8.95, $8.21, and now $6.24.
In addition, the price trading below the 200-day Exponential Moving Average (EMA) indicates that the asset remains in a strong bearish trend, with sellers firmly in control.
Based on the current price action, if AVAX continues its current trend and remains below the $6.24 level, it could witness further downside in the coming days.
However, a potential recovery would only become likely if the price reclaims the $6.24 level; otherwise, the bearish trend is expected to continue.
At press time, AVAX’s Average Directional Index (ADX) stood at 54.89, well above the key threshold of 25, indicating a strong directional trend in the asset.
Traders and investors’ mixed sentiment
Not only has AVAX’s market structure turned bearish, but trader sentiment has also followed the same path, as market participants appear to be betting on further downside.
Derivatives data from CoinGlass shows that AVAX’s Long/Short Ratio has fallen to 0.8709, indicating strong bearish sentiment among traders.
Meanwhile, Open Interest (OI) has jumped 2.31% to $261.78 million, suggesting that bears are actively building positions, further reinforcing the possibility of additional downside in the coming days.
As of now, $5.93 on the downside and $6.17 on the upside are the major liquidation levels.
Traders have built $1.24 million worth of long positions at the lower level and $2.75 million worth of short positions at the upper level, indicating that bears are currently dominating the market while bulls appear to be losing momentum.
However, on-chain analytics paints a slightly different picture. Data from Nansen shows that the top 100 AVAX addresses have increased their holdings by 1.47%, indicating potential accumulation during the recent price dip.
At the same time, exchange reserves have fallen by 0.30%, suggesting that not only are top holders taking advantage of the decline, but long-term investors are also following the same approach.
Final Summary
- AVAX plunged 9.50%, losing a major key support level, with the chart signaling the possibility of further downside ahead.
- Traders and investors appear to have mixed sentiment, as traders are betting on price declines, while investors seem to be taking advantage of the dip.