AVAX Price Risks Drop To $16 As This Rejection Sparks Bearish Alarm

Key Insights:

• AVAX price declined to $26.50 as analysts view the risk of falling to $16.
• The Avalanche expansion soared 66%, an indicator of network adoption.
• AVAX shorts can potentially liquidate as the price rises past $26.16.

AVAX price is downward, being rejected once again at $26.50. The token has been trading between resistance and support levels.

Also, analysts identified both bearish and bullish triggers. The market activity and liquidation indicators indicate increased volatility in the future as traders await the confirmation of the following major move.

AVAX Price Struggles at $26.50 Resistance

According to analyst Ali, Avalanche was rejected at $26.50. It’s a level that has capped rallies several times this year. The rejection consolidated a long-term pattern in the channel that has been driving Avalanche trading for months.

Ali pointed out that the new trend suggests a possible reversal to $16 support in case of a continued downtrend.

The chart indicated that there were recurrent failures around the levels of $26.50 with sharp downturns. This critical demand zone has been the lower boundary at $16.

The mid-range is put under pressure with AVAX price trading at a range of around $23.88. A further fall can pull the token to $21 first before testing support.

Transaction Growth Adds Fundamental Support

However, despite its technical weakness, Avalanche has on-chain strength. Analyst Sjuul indicated that Avalanche is the fastest-growing blockchain transaction.

Government-related implementations in the United States have enhanced its growth. Recent statistics revealed more than 11.9 million daily transactions, a 66% increase.

Such a rise in activity has allowed Avalanche to keep up with competitors, including Starknet, Base, and Optimism. Active addresses decreased. However, there is evidence that the network is experiencing transaction growth.

This indicates that it is in demand. To most investors, this difference between price and fundamentals gives AVAX an element of resilience.

Consolidation Could Trigger an AVAX Price Breakout

According to Trader Khalil, the AVAX price consolidated over a period of over seven months. He said, This sideways movement takes a long time to position a big move.

However, the chart highlighted either a sharp upward breakout above resistance or a deeper drop toward prior lows.

Khalil stressed patience, claiming to wait for a breakout trigger to position. The chart identified a big falling resistance line. It must be broken to realize a bullish reversal.

If the breakout happens, more than $35 and $45 targets might open. If not, AVAX price risks more downside within the current consolidation band.

Liquidation Levels Suggest Volatility Ahead

Meanwhile, Wakanda Warrior pointed to liquidation data indicating that 22.29 million Avalanche shorts may be liquidated. This could be seen if the token reaches $26.16.

At $23.39, any push-up might compel shorts to cover, creating momentum. Most of these leveraged positions are held in exchanges like Binance, OKX, and Bybit.

This liquidation map indicates a possible liquidity pocket that will cause sharp spikes on its way in, if it is tried. Nevertheless, traders also observe that these levels may not be attained yet.

This might cause bearish pressure to persist. Until the AVAX price closes above $26, sellers can control prices. However, there is still a risk of a short squeeze.

Disclaimer

This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.