AVAX is having a rough week.
The altcoin continued its slide over the last 24 hours, shedding 14% of its value as selling pressure swept across the crypto market. However, what has been surprising is the fact that the decline happened despite strong whale activity on the network.
Normally, a hike in whale participation is seen as a positive sign. So far though, it hasn’t translated into price support.
On the daily chart, the altcoin broke past its key monthly support zone at $8.05 – A level that has held firm since February. The token’s price action has dipped so aggressively that at press time, it was trailing below key Exponential Moving Averages.
Is the market leaning heavily bearish?
One reason may be the growing dominance of short sellers.
More than 70% of press time positions were shorts – Evidence that most traders expect the decline to continue. That kind of imbalance can create additional pressure, especially when buyers have been struggling to regain any momentum.
Right now, the market sentiment around AVAX is simple – Traders are more interested in protecting capital than chasing a rebound.
Big money may be less interested
That’s another concern.
Avalanche network’s total Open Interest dropped to around $159 million at press time. This implied that fewer traders might be willing to keep money in AVAX-related positions.
In most cases, a fall in Open Interest during a sell-off points to weak conviction and a decline in participation. Now, that doesn’t necessarily mean institutions are abandoning AVAX. However, it does allude to enthusiasm cooling down significantly when compared to previous weeks.
Could whales be selling?
Now, that’s the question many traders are asking right now.
Whales have been active on the network, but the price has continued to fall. There’s been no clear evidence of panic selling though. Even so, the lack of aggressive accumulation means that large holders might not be rushing to buy this dip right now..
As it stands, bears remain firmly in control. Until buying activity returns and market sentiment improves, AVAX could struggle to break out of its prevailing downtrend.
Final Summary
- AVAX lost 14% of its value in just 24 hours.
- More than 70% of its traders are betting on further bearish trend continuation.