Avalanche (AVAX) drops below $27, with analysts predicting a potential crash to the $20 mark as bearish pressure intensifies.
As altcoins prepare for a reversal rally, multiple blue-chip tokens continue to struggle. One such token is Avalanche, down by 3.6% over the past 24 hours. This brings the 7-day return to -18.3%.
Dropping under its $11 billion market cap, Avalanche is now trading at $26.90. Amid the increasing bearish influence, will Avalanche find a bullish reversal spot, or is it doomed to crash under $20?
Is The Avalance Crash Inevitable?
On the daily chart, the AVAX price trend reveals a bearish breakdown of a local support trendline. This support trendline formed a falling-channel pattern with a parallel resistance trendline.
On February 2, the 14.95% drop in Avalanche resulted in the breakdown rally. With the downfall, Avalanche also lost the crucial support level at the 61.8% Fibonacci level at $28.91.
The ongoing downfall started after the morning star pattern near $34.34. Over the past five days, the downtrend has erased 21.66% of AVAX’s market value.
With a post-retest fall from the 61.80% Fibonacci level, Avalanche is nearing the 78.60% Fibonacci level at $24.34. While the short-term intraday recovery of 1.4% hints at a brief bullish bounce, the bearish influence reveals a strong possibility of a downtrend continuation.
This is highlighted by the Trend Strength Index (TSI), which has dropped below the halfway level and now stands at -0.89, indicating an extremely bearish trend.
Furthermore, the downfall has influenced a massive downtick in the lower Bollinger Band, accompanied by a sharp fall in the 20-day EMA line.
AVAX Price Targets: Analyst Puts $20 on Radar
Highlighting the potential for a major decline, crypto analyst Ali Martinez points to significant downside risk in the AVAX price trend. Martinez forecasts a triangle breakdown rally on the 5-minute chart.
#Avalanche $AVAX appears to have broken out of a symmetrical triangle, setting up a potential downswing toward $20! pic.twitter.com/nZnMUdHMIj
— Ali (@ali_charts) February 4, 2025
The analyst predicts that Avalanche’s downtrend could lead to a drop to the $20 psychological mark. Based on price analysis, the downtrend will likely fall below the 78.60% Fibonacci level at $24.34.
This would make the $19.55 support level the next price target, indicating the potential for a fall below $20. On the upside, the 61.80% Fibonacci level at $28.91, which aligns with the broken support trendline, remains a key resistance level.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.