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AVAX faces bearish breakdown – Is a drop to $20 next?
Avalanche (AVAX) has breached the symmetrical triangle pattern, typically indicating a bearish trend. As a result, market analysts are sounding the alarm about a potential drop in price to $20.
According to the data, AVAX’s recent price action suggests that the cryptocurrency is poised for a downward trend. The cumulative volume delta (CVD) has fallen sharply to -5.143M, indicating an imbalance of sell orders over buy orders. Additionally, the RSI remains below 50, confirming sustained bearish momentum.
The market value to realized value (MVRV) ratio reveals that AVAX’s MVRV had seen volatility in recent times, with notable peaks followed by corrections. A high MVRV ratio often implies overvaluation, leading to downward pressure as traders sell to secure profits. In contrast, a low or negative MVRV ratio suggests undervaluation and potentially signals a buying opportunity.
Based on the current market dynamics, the MVRV ratio hints that early investors may still be holding unrealized losses. If the ratio remains low, it could indicate an accumulation phase before a recovery. However, if it rebounds quickly, profit-taking could stall any bullish momentum.
Furthermore, open interest (OI) has plummeted to 79.855M, suggesting traders are closing positions and reducing their exposure to AVAX. This decline in OI aligns with the bearish outlook, indicating that fewer traders are willing to take new leveraged positions on AVAX. A sudden uptick in OI would signal renewed trader interest, potentially foreshadowing a trend reversal or an upcoming volatility spike.
As the cryptocurrency’s price continues to falter, it appears increasingly unlikely that we will see any significant upward movement anytime soon.
Source: ambcrypto.com
