AVAX draws short sellers as it dives below $30: Deeper plunge ahead?

• AVAX has broken down a critical resistance level.
• Metrics suggest a bearish trend continuation

Avalanche [AVAX] has recently witnessed  a significant breach below a key support level at $30.

AVAX has broken below $30 support level, which has acted as a critical floor since early May. This breakdown could open a new bearish momentum as investors may see this as a sign of weakness.

Key support breached

AVAX was rejected at 50-day Exponential moving average resistance level at $35. This resistance is a significant barrier for AVAX as the rising bearish momentum has overwhelmed the support level at $30.

It also indicated that further price dips may be witnessed. The price has now settled at around $28 with the next immediate support level being $27.

The downtrend was further reinforced by descending trendline which has been in place since April. 

Source: Tradingview

What tale do AVAX metrics tell

AMBCrypto’s analysis of Santiment’s data on whale and development activities show a mixed picture.

The development activities indicate fluctuations but is relatively stable. However,the percentage of stablecoin held by whales has dropped, suggesting a possible reduction in whale interests or a shift in their investment strategies.

Source: Santiment

AVAX Liquidation insights

The liquidation data from coinglass show several spikes in liquidation. This correlates with the sharp price movements indicating an increased volatility.

The recent increase in short liquidations suggest that traders are staking on further price declines.

Source: Coinglass

AMBCrypto further analysed coinglass long/short ratio data. The data highlights an increasing number of investors taking short positions on AVAX.

This suggests that investors are staking on further price declines.

Source: Coinglass

Read Avalanche’s [AVAX] Price Prediction

The path ahead

While the short-term outlook for AVAX appears bearish, its future trend will largely depend on the market sentiments and fundamentals.

If its developments activity and community engagement remain strong, a potential reversal may be on the horizon. However if the current bearish sentiment persists, AVAX may face further declines in the near future.