Avax, the native token of Avalanche, looks bearish and is ready for a price decline as it has formed a bearish price action pattern on the daily timeframe. However, the current market sentiment is quite unpredictable, with some cryptocurrencies witnessing price surges while others are experiencing notable price drops.
AVAX Technical Analysis and Price Action
Amidst this, Avax reached a crucial support level of $35 and is struggling to maintain this level. Since December 2024, the Altcoin has reached this level several times, and each time it has witnessed a price surge. However, current market sentiment seems unfavorable for AVAX and indicates that it may not maintain this level.
Based on recent price action and historical momentum, if Avax fails to hold this level and closes a daily candle below the $34.50 level, it could decline 14% to the $34.50 level. $29 in the next few days.
In addition to this bearish price action, the Avax Relative Strength Index (RSI) is currently near the oversold zone, indicating a potential price reversal. However, this reversal seems difficult for the altcoin.
Bearish outlook from traders
Looking at market sentiment, traders are betting heavily on short positions, as revealed by on-chain analytics firm Coiginglass. At press time, the AVAX long/short ratio stands at 0.85, indicating bearish sentiment among traders. The data further reveals that 54.5% of top AVAX traders currently hold short positions, while 45.5% hold long positions.
Despite bearish sentiment and traders’ strong bets on short positions, long-term holders have shown strong interest and confidence in the altcoin.
Optimistic outlook for long-term incumbents
Data from the spot inflow/outflow metric revealed that exchanges experienced an outflow from Avax worth $5.90 million in the last 24 hours. This data indicates long-term sentiment from investors who appear to be betting on AVAX, despite its prices struggling to gain momentum.
Avax is currently trading near $34.96 and has seen a 6.35% price drop over the past 24 hours. During the same period, its trading volume increased by 30%, indicating the growing participation of traders and investors compared to the previous day.
