Could AVAX Experience an 18% Drop? Short Bets, Whales, and More

The price momentum of Avalanche (AVAX) is currently suggesting a bearish trend, which indicates a potential major dip could occur soon. On-chain data from Coinglass and CryptoQuant show that this negative sentiment is gaining traction, particularly as many traders are taking short positions.

Key Takeaways

Avalanche (AVAX) is experiencing a shift towards a bearish market sentiment.
Significant liquidation zones are identified at $16.79 (lower) and $17.65 (upper).
There is a notable dominance of short positions, with traders betting against an AVAX price rally.
At present, AVAX is trading at $17.20, with a 2.85% decline on the charts and a drop in trading volume to $387 million.
Continued trading below the $18 mark may set the stage for an 18% drop, potentially leading to support levels around $14.

Understanding AVAX's Bearish Signals

Traders of AVAX have pinpointed two crucial levels where they are heavily leveraged, which are referred to as strong liquidation zones – $16.79 on the lower end and $17.65 on the upper end. These prices reveal significant trading activity.

At these levels, traders have accumulated $1.07 million in long positions compared to $4.15 million in short positions, showcasing a clear dominance of sellers and reinforcing a bearish outlook for this altcoin.

AVAX Exchange Liquidation Map Source: Coinglass

In analyzing the data from CryptoQuant’s Futures Taker CVD, it becomes evident that recent trading has been dominated by sell orders. This trend indicates that many traders are adopting short positions on AVAX, anticipating that its price will not see significant upward movement soon.

Avalanche: Futures Taker CVD Source: CryptoQuant

By integrating these on-chain indicators with derivatives data, it appears that AVAX is now firmly in the hands of bearish traders. This raises the question of whether it might be a good time to sell off AVAX or to establish new short positions.

Currently, AVAX is trading down by 2.85% at $17.20, with a notable decline in market activity, as seen in its trading volume of $387 million.

Analyzing Price Action and Technical Indicators

AMBCrypto’s review of the four-hour chart highlights that since October 2025, AVAX has been confined within a descending channel pattern, oscillating between its upper and lower boundaries.

Recently, after a price recovery, it reached the upper boundary, where it encountered selling pressure and formed a bearish candlestick pattern.

AVAX price action Source: Trading View

Should AVAX maintain its downward trajectory and stay below the $18 mark, we could see an additional decline of up to 18%, potentially driving the price towards its next support level at $14. If bearish momentum continues, the price could drop even further.

The bearish view remains intact as long as AVAX trades under the $18 threshold. However, this analysis could change if it rises above that level.

Despite the prevailing bearish sentiment, technical indicators provide some conflicting signals. The Supertrend indicator currently shows positive momentum for AVAX, indicating an uptrend. Additionally, the Average Directional Index (ADX) reading of 20.35 is below the critical level of 25, suggesting that the asset is currently experiencing weak directional momentum.