Avalanche (AVAX) suffered a major price crash over the last few days, breaking below the key $20 resistance level. This post sponsored by BlockchainShock will explain why this recent bear market has been different. We’ll identify AVAX price support levels and discuss AVAX future price history, including AVAX predictions for AVAX downtrend and uptrend. By examining both technical indicators and market sentiment, we aim to provide traders with actionable insights for navigating AVAX's volatility.

Technical Breakdown: What Triggered the Price Drop?

Here are some technical reasons that have come together to make for a bearish forecast on AVAX right now. As seen last week, AVAX created a bearish harami candlestick pattern which is often an indicator of an impending price reversal. This was soon followed by the breakdown of its deeply ingrained bullish structure, marking the loss of upward momentum. This formation of a double top pattern around the $19.05 level strengthened this bearish momentum even more.

Double Top Formation and Psychological Barrier

The double top pattern set off an avalanche of selling pressure. This was made worse by multiple rejections at the $20 psychological level. Traders sometimes view double top patterns as obvious indicators. They use these patterns to close out long positions or initiate short positions, anticipating that prices will fall further. This sudden selling pressure caused AVAX’s price to plummet down to $18.61.

Diminishing Optimism and Rising Selling Activity

On-chain data corroborates a huge clean out of bullish positions. This caused traders to liquidate $1.40 million long contracts in spans of just 24 hours but only $86,000 short positions. This represents a meaningful change in overall market sentiment, as there are comparatively less traders willing to gamble on AVAX continuing to rise. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are both in a downward trend, indicating increasing selling pressure. Open Interest in AVAX derivatives has tanked, reaching a 30-day low. This 51% plunge represents a significant drop in purchasing power and a diminishing excitement to enter the macro housing market. The first thing that catches my eye is the formation of the double top pattern. Taken together with other technical and on-chain signals, this points to strong trader profit-taking at higher levels to avoid further losses.

Potential Support Levels and Future Scenarios

Everything about the current outlook is bearish. It is important to figure out where AVAX could possibly be supported and find a bottom before reversing course.

Key Support Levels to Watch

If a potential double bottom that’s developing near $18.50 does hold, it may point toward a longer-term bullish reversal. This next level to the upside is going to need to be watched closely for any signs of buying pressure forming. If AVAX doesn’t manage to hold this level, deeper drops might be in store.

Projected Price Predictions: 2025-2027

Here are some projected price predictions for AVAX:

  • September 2025: $18.37 (minimum), $20.55 (average), $21.99 (maximum), with a potential return on investment of 22.74%.
  • October 2025: $22.04 (minimum), $23.68 (average), $25.71 (maximum), with a potential return on investment of 43.49%.
  • November 2025: $25.72 (minimum), $30.52 (average), $38.19 (maximum), with a potential return on investment of 113.10%.
  • December 2025: $40.05 (minimum), $43.06 (average), $44.30 (maximum), with a potential return on investment of 147.24%.
  • 2027: $50.46 (minimum), $58.62 (maximum).

These predictions are all very rosy, but don’t get ahead of yourself. Beyond the cryptocurrency market being wildly volatile overall, it is very susceptible to any unpredictable event.

Navigating AVAX's Volatility: Strategies for Traders

With volatility and uncertainty at the highest levels that we have seen in many years, traders must execute prudent strategies to maximize return and limit risk.

Risk Management and Trading Strategies

By employing these strategies and keeping an ear to the ground on market trends, traders can better navigate AVAX’s volatility.

  • Hedging: Use hedging strategies, such as futures contracts, to protect investments from market volatility.
  • Risk Management: Utilize proper risk management techniques, including setting stop-loss orders and determining an acceptable level of risk.
  • Scalping: Employ scalping strategies, aiming to make small profits on multiple trades throughout the day.
  • Swing Trading: Use swing trading, which involves holding positions for a few days or weeks to profit from medium-term price movements.
  • Disciplined Approach: Develop a disciplined approach and understand the psychology of day trading to avoid impulsive decisions driven by emotions.

BlockchainShock will keep a close eye on AVAX’s price action and update you accordingly as things develop.

BlockchainShock will continue to monitor AVAX's price action and provide updates as the situation evolves.