Important points
Will AVAX price collapse soon?
The altcoin price trend reveals that AVAX is moving within a descending channel pattern on the 4-hour chart.
What does an AVAX trader do?
As of this writing, AVAX traders appear to be overleveraged with $16.79 on the downside and $17.65 on the upside.
Avalanche (AVAX)’s continued price momentum shifts market sentiment to the bearish side, suggesting a big drop could be in the offing. In fact, this bearish outlook has become even stronger recently, according to on-chain datasets from Coinglass and CryptoQuant. Especially since traders are aggressively betting on short positions.
A bearish signal for AVAX?
AVAX traders have identified two key levels that are overleveraged and hold strong liquidation zones – the downside at $16.79 and the upside at $17.65. These are both levels at which significant trading interest has been recorded to date.
At these levels, traders have placed $1.07 million in long positions and $4.15 million in short positions, confirming the bearish altcoin signal and showing a strong seller advantage.
Source: Coin Glass
However, that’s not all. You can use CryptoQuant’s Futures Taker CVD data to assess whether buyers or sellers are controlling the market.
According to the paper, AVAX has been dominated by taker sell orders over the past week. This is a sign that traders are actively shorting the asset, believing that AVAX is unlikely to rise any time soon.
Source: CryptoQuant
These on-chain metrics, combined with the derivatives data, would make it appear that AVAX is in bearish control. This would also raise the question of whether it is an ideal time to offload AVAX or to build a new short position.
At the time of writing, AVAX was down 2.85% on the chart, with the altcoin trading at $17.20. Market participants also decreased significantly, and trading volume decreased to $387 million.
Price fluctuations and technical analysis
Finally, technical analysis of AMBCrypto’s 4-hour chart reveals that AVAX has been staying within a descending channel pattern since October 2025, fluctuating between the upper and lower bounds.
However, after the recent recovery, the price reached a ceiling, a level that subsequently faced selling pressure and formed a bearish candlestick pattern.
Source: Trading View
If AVAX continues its decline and remains below the $18 level, a further 18% drop is possible and could reach the next support at $14. If the bearish momentum continues, further declines are possible.
The bearish outlook on AVAX will remain valid as long as the asset remains below the $18 level. Otherwise, it may become invalid.
Despite the bearish analysis, technical indicators were flashing some bullish signals on the 4-hour chart at the time of writing. For example, the Supertrend indicator suggested that AVAX was flashing green when the altcoin was stuck in an uptrend.
Similarly, the measured average directional index (ADX) was 20.35, which was below the critical threshold of 25. This indicates weak directional momentum for the asset.