 to $7 after breaking key support levels. Declining open interest and RSI trends add to bearish concerns.){kind=link}
Prominent crypto analyst Ali Martinez has issued a bearish forecast for Avalanche ($AVAX), predicting a steep decline to $7 following a key channel breakout.
Martinez, known for his technical and on-chain analysis, highlighted that AVAX has “broken loose” from a critical support level, signaling a significant downtrend.
Currently trading at around $18, AVAX has experienced strong price movement in recent weeks.
However, Martinez warns that market conditions are turning unfavorable, making a drastic correction increasingly likely.
If the prediction materializes, this would mark one of the most significant drops in AVAX’s recent history, raising concerns among investors and traders.
Declining Open Interest Signals Weakening Market Confidence
A major factor supporting the bearish outlook is the steady decline in open interest for AVAX.
Open interest, which tracks the total number of outstanding derivative contracts such as futures and options, has dropped by 0.97% in the past 24 hours, now standing at approximately $189 million.
The percentage drop suggests that traders are closing their positions and reducing exposure to AVAX, which is often a sign of weakening confidence.
Lower open interest typically results in reduced liquidity and increased volatility, both of which could accelerate a potential price drop. If this trend continues, it could further validate Martinez’s forecast of a sharp decline.
RSI Indicator Suggests Limited Buying Pressure
Technical indicators further support the possibility of a downturn, particularly the Relative Strength Index (RSI) for AVAX, which currently sits at 54.
The RSI is a momentum indicator that measures whether an asset is overbought or oversold, ranging from 0 to 100.
While an RSI of 54 is considered neutral, it indicates that buying pressure is not strong enough to sustain current price levels.
If the RSI trends downward in the coming days, it could reinforce the bearish sentiment, leading to increased selling pressure and a potential decline toward the predicted $7 price target.
Also Read: Analyst Ali Martinez Sees Solana ($SOL) Primed for Climb from Channel’s Base, Eyes $140 Resistance
Potential Impact on Investors and the Avalanche Ecosystem
A drop to $7 would represent one of the most significant price corrections for AVAX in recent history, potentially triggering a wave of sell-offs and heightened investor anxiety.
However, some long-term investors may view such a decline as a buying opportunity, especially if they remain confident in Avalanche’s long-term prospects.
The Avalanche ecosystem, known for its high-speed blockchain capabilities and increasing adoption in decentralized finance (DeFi) and NFTs, may need to address broader market concerns to stabilize the token’s price.
As of now, AVAX is trading at $18.71, with a 24-hour trading volume of $266.9 million and a market cap of approximately $7.87 billion.
While the short-term outlook remains uncertain, the next few weeks will be crucial in determining whether Martinez’s bearish prediction plays out or if AVAX can maintain its current momentum.
Also Read: $PEPE Forms Inverse Head-and-Shoulders Pattern, Analysts Eye $0.0000105 Target