Avalanche (AVAX) Price Slides Under Demand Zone — Decline Below $20 Likely

Key Takeaways

• AVAX’s price has fallen below crucial support and plummeted to its lowest level since November 2024.
• A notable sell wall between $27.89 and $51.88 indicates that recovery might not happen soon.
• The daily chart has flashed a sell signal amid bearish momentum, which could lead to another decline.

As CCN analysis forecasted some weeks ago, the price of Avalanche (AVAX) has dropped below the $30 mark. This comes after the altcoin lost 28.70% of its value within the last month.

Several factors, including a lack of demand and intense selling pressure, contributed to this decline.

Now trading at $25, a level it has not hit since Nov. 6, 2024,  it appears that AVAX’s correction is not over. Here is why

AVAX Price Loses Crucial Support

The daily chart shows AVAX surged above $50 in December, driven by strong buying pressure at the $27 demand zone—the same level that fueled its rally to $60 in March 2024.

However, AVAX has now fallen below this critical level, indicating weakness in its price action. The Money Flow Index (MFI), which measures the flow of capital into and out of a cryptocurrency, also aligns with this thesis.

Typically, when the MFI increases, it indicates a rise in buying pressure. However, as of this writing, the reading has dropped below the 50.00 neutral line, implying that AVAX lacks a significant influx of liquidity.

Should this trend continue, the AVAX price is less likely to rebound. Instead, the cryptocurrency’s value might face another round of correction.

Resistance Awaits

Outside of the technical outlook, the Global In/Out of Money (GIOM) shows that AVAX faces resistance at higher price levels. The GIOM groups are addressed in clusters based on the number of addresses or volumes that were previously bought within a specific price range.

Larger clusters indicate stronger support or resistance at those levels. As seen below, the cryptocurrency faces three major resistance zones.

The first key resistance lies between $27.89 and $35.20, where 1.12 million addresses accumulated over 27 million AVAX. The second major supply zone is between $35.20 and $39.87, with 1.15 million addresses purchasing 21.49 million tokens.

Lastly, resistance exists between $39.87 and $51.88, where 1.33 million addresses bought over 22 million AVAX. The volume of tokens out of the money in this region surpasses those in the money between $13 and $24.68.

Therefore, holders might try to break even if AVAX’s price moves toward this point, which could tug the price back.

Deeper Drop May Be Coming

Looking at the daily chart again, CCN observes that the red line of the Supertrend indicator has risen above the AVAX price. When the green line of the Supertrend moves below the price, it is a buy signal, indicating that the price could increase.

But in this case, the position signifies a sell signal, which suggests that AVAX will likely continue trading downwards. Furthermore, the Moving Average Convergence Divergence (MACD) is in the negative region.

This position indicates bearish momentum around the altcoin. If this continues, the AVAX price might drop below $20.

Once validated, the altcoin’s value could decline to $17.33. However, this trend might change if the token becomes oversold and buying pressure appears.

In that scenario, AVAX’s price could jump to $32.02. Should buying pressure intensify, the altcoin’s value might climb to the 0.618 Fibonacci level at $41.09.