Avalanche (AVAX) Price Alert: Open Interest Crashes to 30-Day Low – More Pain Ahead?
Avalanche''s AVAX token is skating on thin ice as derivatives traders flee the scene. Open Interest just hit its lowest level in a month—and that usually means one thing: buckle up.
Blood in the water?
The smart money''s pulling out while retail investors keep chanting ''buy the dip.'' Meanwhile, AVAX price action looks like a deflating balloon after last month''s hype cycle. Classic crypto.
Silver lining? At least the network''s still faster than Wall Street''s reaction time to a Fed announcement. But with leverage evaporating, AVAX bulls might need more than just tech specs to stop this slide.
Bearish sentiment sparks in AVAX derivatives markets
Coinglass’ data shows the AVAX Open Interest (OI) dropped to $441 million, a decline of over 3% in the last 24 hours. This marks the lowest value in 30 days, suggesting a continued capital outflow from AVAX derivatives as buying activity declines.
Amid waning optimism, $1.40 million in longs were liquidated over 24 hours compared to $86K in short liquidations, suggesting a significant wipeout of bullish positions.
This aligns with the pullback in AVAX and drops the long-short ratio to 0.9451, signaling a greater number of active bearish positions.
Avalanche derivatives. Source: Coinglass
The OI-weighted funding rate fluctuates NEAR the zero line as sentiment among traders shifts. However, the data show an OI-weighted funding rate of 0.0022% as buying activity gains traction in the short term.
AVAX OI-weighted funding rate. Source: Coinglass
An apparent bearish inclination is visible in Avalanche derivatives as selling pressure grows.
Avalanche eyes drop to $16
Avalanche holds above the $18.50 support marked by the April 16 low, recovering slightly from the $18.13 low posted on Tuesday. The AVAX price action reveals overhead pressure, with a couple of long wicked candles this week.
Avalanche could extend its losses towards $16.14 support if it closes below the $18.50 floor, followed by the year-to-date low of $14.66.
The momentum indicators maintain a bearish bias on the daily chart as selling pressure grows. The Moving Average Convergence/Divergence (MACD) indicator fails to cross above its signal line, prolonging the declining trend. With rising red histograms below the zero line, the indicator suggests a surge in selling activity.
The Relative Strength Index (RSI) at 38 is slightly above the oversold boundary, way below the halfway line. With still room on the downside, the indicator aligns with the breakdown possibility.
Typically, in oversold conditions, bullish reversal chances are heightened. However, a potential consolidation in the oversold zone could prolong AVAX’s correction.
AVAX/USDT daily price chart.
Suppose Avalanche bounces off the $18.50 support level if the broader market stabilizes. It could propel AVAX towards the 50-day Exponential Moving Average (EMA) at $21.11.
