Avalanche Slides to $23 as Shorts Dominate: Can Bulls Defend $22.64 Support?
Avalanche (AVAX) has continued to fall, down 2.56% to $23.14 after a 6% drop yesterday. The move reflects the bearish sentiment...
Quick overview
- Avalanche (AVAX) has dropped 2.56% to $23.14, reflecting bearish sentiment in the derivatives market.
- The long-to-short ratio has fallen to 0.84, indicating traders are favoring shorts over longs.
- Technicals show weakness with AVAX trading near key support levels, and a potential rebound or breakdown setup is in play.
- Despite short-term challenges, the introduction of a yen-pegged stablecoin enhances Avalanche's long-term adoption prospects.
Avalanche (AVAX) has continued to fall, down 2.56% to $23.14 after a 6% drop yesterday. The move reflects the bearish sentiment in the derivatives market where negative funding rates and a rising short bias suggests traders are preparing for more downside.
According to Coinglass OI-Weighted Funding Rate, shorts are paying longs—usually a bearish sign that precedes bigger corrections. The long-to-short ratio has fallen to 0.84, its lowest in a month, as traders are stacking shorts over longs. Meanwhile CryptoQuant’s Taker CVD is negative, indicating sell pressure.
Avalanche (AVAX) Technicals Show Weakness
The technicals mirror the derivatives data. AVAX is trading just above the $22.64 support and making a descending channel capped by the trendline resistance at $25.63. Price has broken below the 50 period SMA at $24.13, confirming the bearish momentum.
Candlestick formations show hesitation: long lower wicks suggest dip buying, but no bullish engulfing candles means no conviction. The RSI is 35.8, oversold and may be exhausted of selling. The MACD histogram is flat, an early sign of momentum shift if buyers come back.
Key levels to watch:
- Support: $22.64 and $21.98, with deeper risk to $21.41.
- Resistance: $24.14 (SMA) and $24.75, then $25.63.
Trade Setup: Rebound or Breakdown?
For traders, AVAX is a clear risk setup. A speculative long entry near $23.00-$22.70 can be taken if support holds, targeting $24.14 and $24.75. Stops should be below $21.98 to protect against further losses. But if it can’t recover above $24.00, the bearish channel is intact and we’re looking at $21.41.
This setup shows how trendlines, RSI and moving averages can guide your trade. Novices should look for bullish reversal candles—engulfing or morning star—before adding more capital.
Long Term Tailwind: Stablecoin Expansion
Despite short term headwinds, Avalanche wins on adoption. JPYC Co., Ltd., a licensed Japanese fund transfer company, will issue a yen-pegged stablecoin on Ethereum, Avalanche and Polygon. The 1:1 backed token adds to Avalanche’s utility in the Japanese market and its long term case as a blockchain for real world applications.
Points to note:
- AVAX at $23.14, above $22.64 support.
- Shorts are in control, long-to-short ratio at 0.84.
- Technicals are weak, watch $21.98 on the downside, $24.75 on the upside.
- Stablecoin integration is good for Avalanche’s long term adoption.
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