Avalanche's AVAX token is trading at $6.53, stuck below a descending stack of moving averages that signals persistent bearish pressure. Sell-side taker flow has dominated the market, and analysts now assign a 65% probability of a breakdown to $6.26. But the same setup could also fuel a short squeeze that pushes the price back to $6.78.
Why the moving averages matter
AVAX is currently below its 50-day, 100-day, and 200-day moving averages, with each average sloping downward. That configuration — shorter averages below longer ones — is a textbook bearish alignment. Traders often see it as a sign that sellers are in control and that any rally will face resistance at each of those levels. The price has been unable to reclaim even the 50-day moving average, which sits above the current spot price.
Sell-side taker flow and the breakdown scenario
Order book data shows aggressive selling from takers, meaning market participants are hitting bids rather than waiting for passive orders. That kind of flow tends to push prices lower quickly. Analysts modeling the current momentum put the chance of a drop to $6.26 at 65%. That level is roughly 4% below today's price and represents a zone where the token last found support in early March. If AVAX breaks through $6.26, the next floor could be even lower, though the data provided does not specify a further target.
The short squeeze counterplay
Not everyone is betting against AVAX. The same positioning that makes a breakdown likely also creates conditions for a short squeeze. If enough traders are short and the price suddenly rises — triggered by a buy order cluster or a positive catalyst — those shorts may be forced to cover, accelerating gains. Analysts see a possible squeeze target of $6.78, roughly 4% above the current price. That would put AVAX back near its 20-day moving average, a level that has acted as resistance in recent weeks.
Whether the breakdown or the squeeze materializes depends on order flow in the coming sessions. If sell-side pressure continues, $6.26 is the level to watch. If buyers step in and trigger stop-losses on short positions, $6.78 becomes the immediate test.
