AVAX, the native token of Avalanche, is currently facing a bearish outlook as it has formed a bearish price action pattern on the daily time frame. The market sentiment is quite unpredictable, with some cryptocurrencies witnessing price surges while others experience notable price declines.
AVAX Technical Analysis and Price Action
In the midst of this uncertain market sentiment, AVAX has reached a critical support level of $35 and is struggling to maintain this level. Since December 2024, the altcoin has tested this support level multiple times, with each test followed by a price surge. However, the current market conditions suggest that AVAX may struggle to hold this level.
Based on recent price action and historical momentum, if AVAX fails to hold the $34.50 level and closes a daily candle below it, the price could potentially drop by 14% to reach the $29 level in the coming days.
Despite the bearish price action, the Relative Strength Index (RSI) for AVAX is currently near the oversold area, indicating a potential price reversal. However, the likelihood of a reversal remains uncertain.
Traders’ Bearish Outlook
Market sentiment among traders appears bearish, as evidenced by data from the on-chain analytics firm Coinglass. The current AVAX long/short ratio stands at 0.85, indicating a bearish sentiment among traders. Approximately 54.5% of top AVAX traders are currently holding short positions, while 45.5% are holding long positions.
Despite the bearish sentiment and traders’ preference for short positions, long-term holders continue to show confidence in AVAX.
Long-Term Holders Bullish Outlook
Data from the spot inflow/outflow metric indicates that exchanges have witnessed an outflow of AVAX worth $5.90 million in the past 24 hours. This data suggests a bullish sentiment among long-term investors who remain optimistic about AVAX, despite its current struggle to gain momentum.
As of now, AVAX is trading near $34.96 and has experienced a price decline of 6.35% in the past 24 hours. However, trading volume has increased by 30% during the same period, indicating growing participation from traders and investors compared to the previous day.
In conclusion, AVAX faces a challenging market environment with bearish price action and uncertain market sentiment. Traders remain bearish on the altcoin, while long-term holders continue to show confidence in its potential. The coming days will be crucial for AVAX as it navigates through these challenging market conditions.