Is AVAX set for an 18% drop? Short bets, whales, and more…
Traders are aggressively betting short, with price action depending on a few key metrics.
Key Takeaways
Will AVAX’s price crash soon?
Altcoin’s price action revealed that AVAX has been hovering within a descending channel pattern on the four-hour chart.
What are AVAX traders doing?
At the time of writing, AVAX traders seemed to be over-leveraged at $16.79 on the lower side and $17.65 on the upper side.
Avalanche’s (AVAX) ongoing price momentum has shifted market sentiment towards the bearish side, hinting that a major dip could be on the horizon soon. In fact, according to on-chain datasets from Coinglass and CryptoQuant, this bearish outlook has strengthened further lately. Especially as traders have been aggressively betting on short positions.
A bearish signal for AVAX?
AVAX traders identified two key levels where they are over-leveraged, holding strong liquidation zones – $16.79 on the lower side and $17.65 on the upper side. These are both levels where significant trading interest has been recorded so far.
At these levels, traders placed $1.07 million in long positions and $4.15 million in short positions, indicating strong seller dominance while confirming a bearish signal for the altcoin.
That’s not all though as CryptoQuant’s Futures Taker CVD data can be used to assess whether buyers or sellers are dominating the market.
According to the same, AVAX has been dominated by taker sell orders over the past week – A sign that traders have been aggressively shorting the asset, believing that AVAX is unlikely to rally north anytime soon.
When combining these on-chain metrics with derivatives data, it would seem that AVAX may be under the control of the bears. This would also raise the question of whether it is an ideal time to offload AVAX or to build new short positions.
At press time, AVAX was down 2.85% on the charts, with the altcoin trading at $17.20. Market participation dropped significantly too, with its trading volume falling to $387 million.
Price action and technical analysis
Finally, AMBCrypto’s technical analysis on the four-hour chart revealed that AVAX has been moving within a descending channel pattern since October 2025, fluctuating between its upper and lower boundaries.
However, following a recent recovery, the price hit the upper boundary – A level where it has since faced selling pressure and formed a bearish candlestick pattern.
If AVAX continues to decline and remains below the $18-level, it could see an additional 18% drop, potentially reaching its next support at $14. It could go even lower if the bearish momentum persists.
AVAX’s bearish outlook will remain valid as long as the asset stays below the $18-level. Otherwise, it could be invalidated.
Despite the bearish analysis, technical indicators flashed some bullish signals on the four-hour chart at press time. The Supertrend indicator, for instance, suggested that AVAX was flashing green as the altcoin stuck to an uptrend.
Similarly, the Average Directional Index (ADX) had a reading of 20.35, below the key threshold of 25 – Indicative of the asset having weak directional momentum.
