Avalanche (AVAX) is on the verge of breaking below the $20 mark, as predicted in CCN’s February 12 analysis. This decline comes amid a broader crypto market downturn, with prices plunging to multi-month lows. Rising panic selling has pushed AVAX into the oversold zone, sparking concerns of further declines.
AVAX Struggles to Find Support
Since testing the $34.40 resistance on February 1, AVAX has faced increasing selling pressure. This has prevented the token from maintaining gains, reflecting the overall market sentiment. The Crypto Fear and Greed Index has dropped to 25, signaling extreme fear among investors. Historically, such levels present two possible outcomes: either a buying opportunity if demand increases or an extended decline if selling pressure continues.
For AVAX, the latter scenario appears more likely, as current data suggests little sign of a reversal. Traders remain cautious, with no significant buying activity to counteract the bearish momentum.
Bearish Indicators Dominate AVAX’s Technical Outlook
From a technical perspective, AVAX’s Relative Strength Index (RSI) has dropped near the oversold region on the daily chart. While this often signals a potential rebound, the Bull Bear Power (BBP) indicator remains negative, confirming the dominance of bearish sentiment.
Furthermore, AVAX has yet to break above its descending trendline. If this bearish momentum persists, the token could experience a prolonged correction, making it difficult to regain lost ground.
On-Chain Data Suggests Further Decline
On-chain analysis from IntoTheBlock further supports the bearish outlook. The In/Out of Money Around Price (IOMAP) metric shows that AVAX faces significant resistance at $23.60. Approximately 128,000 addresses bought 3.31 million AVAX at this level and currently hold unrealized losses, creating a major sell wall.
With AVAX unable to establish strong support, a drop toward $17.52 remains a possibility. However, if demand surges and buying volume exceeds 3 million AVAX, the token could break past $23.60, potentially reclaiming $30 and beyond. For now, traders remain on high alert as AVAX nears a key support test.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Will Avalanche [AVAX] Drop to $22? Whale Activity Slows as Price Faces Key Resistance
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