Avalanche [AVAX] may be heading toward a notable decline as the price fails to sustain its recent breakout. This hints at a repeat of a historical pattern.
Another factor reinforcing the bearish outlook is the broader market sentiment, which remains bearish amid the ongoing geopolitical tensions.
At press time, AVAX was up 2.5% over the past 24 hours, trading at $9.57 with an intraday high of $9.9352. Despite recent price declines, market participation has surged, as trading volume jumped more than 25% to $387 million.
AVAX’s upcoming move: Key levels to watch
Despite the current market structure, a well-followed crypto expert shared a post on X, noting that a successful breakout in AVAX could lead to a notable move. In the post, the expert shared an AVAX chart showing that the asset is on the verge of breaking out of a falling wedge pattern.
On the four-hour chart, however, the structure tells a different story. AMBCrypto’s technical analysis shows that since the 5th of February 2026, AVAX has been trading within a parallel channel, bounded between $8.25 and $9.77.
During this period, it has been observed that whenever the asset reaches either the upper or lower boundary, it faces a strong reversal in the opposite direction.
Notably, AVAX has begun rejecting the upper boundary at $9.77, which suggests the price may be on the verge of repeating history.
Based on the current price action, if the asset remains below the $9.77 level, it could see a price drop of 13.50%, potentially reaching the lower boundary near $8.25 in the coming days.
At press time, the Average Directional Index (ADX), an indicator that measures an asset’s directional strength, has reached 34.55. This indicates strong directional momentum in the asset.
Decoding AVAX accumulation trends
Derivative data suggests that investors may be following AVAX’s past performance and current market structure, as they appear to be dumping their holdings.
According to CoinGlass’ spot inflow/outflow metrics, more than $436K worth of AVAX has been moved to exchanges, hinting at a potential preparation for a sell-off.
In addition, intraday traders are also following the current trend. At press time, the AVAX Long/Short Ratio stood at 0.9419, indicating that sellers are dominating the asset.
Additionally, the data further discloses that traders are currently over-leveraged at $9.34 on the lower side and $10.04 on the upper side. These levels act as key support and resistance levels for the asset.
At these levels, traders have built $3.15 million worth of long positions and $5.14 million worth of short positions. This indicates that traders betting on the short side are currently dominating and outperforming those betting on long positions.
Final Summary
- Avalanche appears bearish on the four-hour chart and is poised for a 13.5% decline.
- Derivative data tools reveal that investors and traders seem to be following the trend.
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