Avalanche (AVAX) has been trading within a price channel between $19 and $54 since December 2023. However, the coin has broken down this channel plunging further following price volatility.
AVAX has been on a downward trend since December 2024 and still continues to face bearish pressure. Following the recent price performance, Avalanche has attracted bearish price predictions from analysts.
Ali Martinez Predicts AVAX Could Dip to $7 After Exiting Key Channel
With Avalanche breaking down a key price channel it has been moving within for the last 14 months, the coin could be destined for further price drop. According to crypto analyst Ali Martinez, Avalanche (AVAX) has ‘broken loose.’
#Avalanche $AVAX breaks loose! Exiting this channel sets up a big price swing to $7. pic.twitter.com/0HJHkmJtd5
— Ali (@ali_charts) March 18, 2025
Martinez, who is prominently known for his on-chain and technical analytical skills, confirmed that AVAX “exiting this channel sets up a big price swing to $7.” In recent weeks the price of AVAX has shown significant movement. According to Martinez current market conditions show bearish signs which indicate a significant price correction could happen.
If the decline predicted actualized, it would represent one of the most extensive price declines for AVAX and would create doubts among market participants. But failure to do so could lead to a trend reversal with the price of Avalanche picking up upward momentum.
AVAX Open Interest Shows Declining Investor Confidence
The open interest of Avalanche is also declining. As per the data on Coinglass, the open interest of AVAX has been on steep decline since late January 2025. The open interest is usually used to measure the number of futures and options derivative contracts.
With the open interest of AVAX declining, it means that the investors are closing their positions. This further means there is lesser exposure to AVAX hence confirming weakening investor confidence.
Lower open interest values often lead to liquidity decline and increase in volatility that potentially speeds up decline in price. The current market trends might strengthen Martinez’s prediction about the drastic Avalanche price drop.
Avalanche’s Price Performance and Technical Outlook
Avalanche’s native token, AVAX is trading at $18.96 as per the 4-hour chart on TradingView. The current price has risen by over 1% over the last 24 hours but remains in a rather sideways movement after falling hard at the start of March.
The key price levels to watch for AVAX include the support at $16.79. If Avalanche continues to dip further, it could risk breaching this support level and dip further. The next support for the coin sits at $12.38 which if breached could fuel a decline to the predicted $7 mark.
AVAX faces short-term resistance at $20.84. If the coin manages to surge past this level, the coin could surge further towards the next resistance at $25.01. Such a performance would invalidate Ali Martinez’s prediction and restore confidence among AVAX market participants.
The Technical Outlook of AVAX
As per the chart above, the Relative Strength Index (RSI) for Avalanche sits at 54.18. This level slightly above the neutral (50) mark, indicates neutral momentum with a weak bullish bias. The price might advance toward the $20 or $25 resistance levels if the RSI moves beyond the 60 mark signaling rising buying intensity. However, the price could break downwards if the RSI falls below 50 indicating waning upward momentum.
On the other hand, the MACD indicator shows a mild bullish crossover. This is confirmed by the MACD (blue) line which is above the signal (orange) line. The MACD shows possible increase in upward momentum but the histogram’s weak bars indicate that buying pressure needs further strengthening before sustained breakout occurs.
How the price of AVAX performs moving forward will determine whether the coin will shift to bullish movement or bearish movement. AVAX is likely to maintain a range-bound price movement if the trading volume neither buyers nor sellers dominate the market.
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