AVAX Drops 5% as Bearish Pattern Emerges in Short-Term Trading

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Avalanche’s native token, AVAX, has seen notable short-term volatility, trading between $21.16 and $19.98 — a 5.5% price swing. Despite intermittent support near $20.10, bears remain in control of the momentum. Over the past 24 hours, AVAX declined by 5%, underperforming the CoinDesk 20 Index (excluding meme coins, stablecoins, and exchange tokens), which fell just 1.7% during the same period.

This movement highlights increasing bearish pressure on one of the top smart contract platforms, raising questions about near-term recovery potential and key support levels.

Short-Term Price Action: A Closer Look

In the last 24 hours, AVAX established a trading range of $1.15 (5.5%), with a high at $21.16 and a low at $19.98. The resistance zone around $20.68 proved strong, marked by a sharp price drop that coincided with the highest volume spike — reaching 1.58 million units traded.

Although bulls attempted a modest rebound, pushing prices up to $20.53, selling pressure quickly returned. Within the past hour alone, AVAX slipped from $20.512 to $20.073, marking a 2.14% decline. This renewed downside momentum confirms weakening buyer confidence.

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A distinct bearish formation has emerged on the hourly chart, driving price down from $20.39 to $20.22. This pattern is further validated by a significant volume surge of over 60,000 units sold — signaling strong distribution activity by large holders or traders exiting positions.

The psychological support at $20.10 has now been breached, though a minor bounce attempt followed the breakdown. However, without sustained buying above $20.50, the path remains open for further downside toward stronger support levels.

Key Technical Levels to Watch

Current technical structure shows:

Indicators reflect growing bearish sentiment:

Traders should monitor whether price stabilizes above $19.80 to avoid accelerating losses. A close below this level could open the door to a test of $19.30 — a critical level for maintaining longer-term structure.

Market Context: Why AVAX Is Underperforming

While broader crypto markets experienced mild corrections, AVAX’s 5% drop stands out negatively compared to peers. Several factors may contribute:

Despite these challenges, Avalanche maintains solid fundamentals:

Still, short-term traders are reacting to technical weakness rather than long-term value — a common trend during risk-off market phases.

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FAQ: Understanding AVAX’s Current Move

Q: What caused AVAX to drop 5% in 24 hours?
A: The decline was triggered by strong selling volume at resistance ($20.68), failure to sustain a rebound above $20.50, and broader risk-off sentiment in crypto markets.

Q: Is AVAX oversold right now?
A: Not yet. While momentum is bearish, RSI levels are not in oversold territory (below 30), suggesting room for further downside before a reversal becomes likely.

Q: What happens if AVAX breaks below $19.80?
A: A breakdown below $19.80 increases the risk of a deeper correction toward $19.30–$19.50, which aligns with historical support and could attract buying interest.

Q: Can AVAX recover quickly from here?
A: Yes — if price regains and holds above $20.50 with strong volume, it could signal renewed bullish control and trigger short covering.

Q: How does AVAX compare to other Layer 1 tokens recently?
A: AVAX has underperformed leaders like SOL and ETH over the past week due to weaker on-chain momentum and lower trader sentiment.

Outlook: Navigating the Downturn

For traders, the current setup favors caution until clear signs of stabilization emerge. A move back above $20.47 with rising volume would suggest short-term bearish exhaustion and possible consolidation.

Longer-term investors may view this pullback as an opportunity, especially if price finds footing near $19.30 with improving fundamentals such as rising subnet usage or protocol revenue growth.

However, until technicals improve, the path of least resistance appears downward.

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Core Keywords

With volatility expected to persist in mid-cap altcoins, monitoring both on-chain metrics and technical structure will be essential for navigating AVAX’s next phase. Whether this dip leads to recovery or deeper correction depends heavily on broader market sentiment and internal ecosystem strength in the coming days.