ALGORITHM PRICE PREDICTION

Last updated: June 19, 2025, 17:33 | Written by: Laura Shin

The cryptocurrency market is known for its volatility, and Avalanche (AVAX), a popular blockchain platform, is no exception.After a remarkable surge in value, more than doubling in 2025, AVAX is now facing a potential correction.While the early part of the year saw impressive gains, fueled by positive market sentiment and strategic partnerships, including one with Amazon and another with Intain, a looming bull trap could spell trouble for investors. The price of AVAX has more than doubled in 2025 but a growing divergence between several key metrics hints at a bearish reversal ahead.This article delves into the factors contributing to this bearish outlook, exploring the technical indicators and market dynamics that suggest a potential 30% price drop in February. Avalanche bull trap risks pushing AVAX price down by 30% in February: The price of AVAX has more than doubled in 2025 Binance AltaafTheBinancian BearorBullWe will examine the bearish divergence forming on the daily AVAX chart, assess the validity of the recent breakout above key resistance levels, and provide insights into how traders can navigate these uncertain times.Understanding these risks is crucial for anyone holding or considering investing in AVAX.

Understanding the Recent AVAX Rally and Resistance Breakout

Avalanche has experienced a significant uptrend, with its price more than doubling in 2025. Avalanche (AVAX) bulls should brace themselves for impact led by a growing divergence between severalkey indicators on the daily-timeframe chart. The daily AVAX chart shows a classic bearishThis impressive rally was supported by a number of positive factors, including improved risk-on sentiment in the broader market and the announcement of partnerships with major players like Amazon and Intain.On January 31st, the partnership with Intain was announced, and the price of AVAX rallied nearly 20% after the news. Avalanche 'bull trap' risks pushing AVAX price down by 30% in Coin SurgesAs of February 2nd, AVAX reached approximately $22.50, showcasing over 100% year-to-date gains.

Technically, AVAX's price has successfully closed above two key resistance levels: a multi-month descending trendline and its 200-day exponential moving average (EMA).This breakout often signals a bullish continuation, enticing traders to enter long positions.However, the presence of a potential bull trap suggests that this breakout might be short-lived and misleading.

The Bearish Divergence: A Warning Sign for AVAX

Despite the positive price action, a growing divergence between several key indicators on the daily timeframe chart is raising concerns. The price of AVAX has more than doubled in 2025, but a growing divergence between several key metrics hints at a bearish reversal ahead.This divergence is a classic bearish signal that suggests the upward momentum is weakening and a price reversal could be imminent.

The most prominent divergence is observed between the AVAX price and the relative strength index (RSI). The price of AVAX has more than doubled in 2025 but a growing divergence between several key metrics hints at Avalanche 'bull trap' risks pushing AVAX price down by 30% in February - XBT.Market Market Cap: $3,352,292,612,952.49While the price has been making higher highs, the daily RSI has been forming lower highs.This indicates that although the price is still rising, the buying pressure is diminishing, signaling a potential slowdown in momentum.

Furthermore, price-volume divergences are also appearing, reinforcing the bearish outlook. The price of AVAX rallied nearly 20% after the announcement. AVAX s price risks drop 30% in February. AVAX s price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponential moving average (200-day EMA; the blue wave) during the ongoing rally. AVAX/USD daily price chart.Typically, a strong uptrend is accompanied by increasing trading volume.However, if the volume starts to decrease while the price continues to rise, it suggests that the rally is losing steam and may be unsustainable.

What is a Bull Trap and How Does it Apply to AVAX?

A bull trap is a false signal in trading that occurs when a stock or asset price appears to break out above a resistance level, leading traders to believe it will continue to rise.However, this breakout is quickly followed by a price decline, trapping those who bought into the upward move.

In the case of AVAX, the successful closure above the descending trendline and the 200-day EMA might be a bull trap. [ad_1]Avalanche (AVAX) bulls should brace themselves for impact led by a growing divergence between several key indicators on the daily-timeframe chart.AVAX price chart paints bearish divergenceThe daily AVAX chart shows a classic bearish divergenceTraders who bought AVAX after these breakouts, anticipating further gains, could find themselves facing significant losses if the price reverses and falls below these support levels.

Analyzing the Potential 30% Price Drop

Several factors support the possibility of a 30% price drop for AVAX in February. The price of AVAX has more than doubled in 2025, but a growing divergence between several key metrics hints at a bearish reversal ahead. Avalanche bull trap risks pushing AVAX price down by 30% in February - CryptoonderzoekerThe bearish divergence discussed earlier suggests a weakening uptrend.If the price fails to sustain above the broken resistance levels, it could trigger a significant sell-off.

A 30% drop from the current price of around $22.50 would bring AVAX down to approximately $15.75. The price-RSI and price-volume divergences appear as AVAX price continues its 2025 uptrend . Notably, Avalanche has rallied by more than 100% year-to-date to $22.50 as of Feb. 2, helped by improving risk-on sentiments and news of its partnership with Amazon. On Jan. 31, Avalanche partnered with IntainThis level could act as a potential support, but a breach of this level could lead to further declines.

Key Support and Resistance Levels to Watch

Understanding the key support and resistance levels is crucial for navigating the potential price fluctuations of AVAX.

Resistance Levels: The previous high of $22.50 acts as immediate resistance.A sustained break above this level would negate the bearish outlook, at least temporarily.
Support Levels: The 200-day EMA and the broken descending trendline now act as support. The price-RSI and price-volume divergences appear as AVAX price continues its 2025 uptrend . Notably, Avalanche has rallied by more than 100% year-to-date to $22.50 as of Feb. 2, helped by improving risk-on sentiments and news of its partnership with Amazon.A failure to hold these levels could trigger a sharp decline. Avalanche bull trap risks pushing AVAX price down by 30% in February Amazon Avalanche AVAXPrice Intain The price of AVAX has more than doubledFurthermore, the $15.75 level represents a key support zone, and a breach of this level could lead to further price depreciation.

How to Prepare for a Potential AVAX Price Correction

Given the possibility of a 30% price drop, it's essential for AVAX holders and potential investors to take proactive measures.

Manage Risk: Implement risk management strategies, such as setting stop-loss orders, to limit potential losses.A stop-loss order is an instruction to your broker to automatically sell your AVAX if the price falls to a certain level.
Diversify Portfolio: Avoid putting all your eggs in one basket. The price of AVAX rallied nearly 20% after the announcement. Avalanche price risks drop 30% in February. AVAX's price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponential moving average (200-day EMA; the blue wave) during the ongoing rally. AVAX/USD daily price chart.Diversify your crypto portfolio to mitigate the impact of a potential AVAX price decline.
Monitor Market Sentiment: Stay informed about market trends and news that could affect the price of AVAX. Avalanche bull trap risks pushing AVAX price down by 30% in February: The price of AVAX has more than doubled in 2025. Binance AltaafTheBinancian BearorBullPay attention to indicators like fear and greed index.
Consider Hedging: Explore hedging strategies, such as shorting AVAX or buying put options, to protect your portfolio from potential losses. In other words, the price of AVAX has been making higher highs since the said date. But, on the other hand, the coin's daily RSI has been forming lower highs. This divergence suggest a slowdown in the momentum of the AVAX/USD pair, which may lead to a price reversal. AVAX/USD daily price chart. Source: TradingViewHedging involves taking positions that offset potential losses in your primary investment.

The Role of Market Sentiment and External Factors

The price of AVAX, like other cryptocurrencies, is heavily influenced by market sentiment and external factors. The price of AVAX rallied nearly 20% after the announcement. Avalanche price risks drop 30% in February. AVAX s price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponential moving average (200-day EMA; the blue wave) during the ongoing rally. AVAX/USD daily price chart.News events, regulatory developments, and macroeconomic conditions can all have a significant impact on investor confidence and trading activity.

Positive news, such as new partnerships or technological advancements, can drive up the price of AVAX.Conversely, negative news, such as regulatory crackdowns or security breaches, can trigger a sell-off.

Macroeconomic factors, such as interest rate hikes or economic recessions, can also affect the cryptocurrency market. The price of AVAX has more than doubled in 2025 but a growing divergence between several key metrics hints at a bearish reversal ahead. Avalanche 'bull trap' risks pushing AVAX price down by 30% in February - InstaCoin.NewsDuring times of economic uncertainty, investors may become more risk-averse and sell off their crypto holdings in favor of safer assets.

Alternative Scenarios: Could AVAX Defy the Bearish Signals?

While the technical indicators suggest a potential price drop, it's important to consider alternative scenarios where AVAX could defy the bearish signals.For instance, if the overall cryptocurrency market experiences a strong bullish resurgence, AVAX could ride the wave and continue its uptrend.Furthermore, if AVAX announces new partnerships or technological breakthroughs, it could generate positive momentum and negate the bearish divergence.

However, it's crucial to remain cautious and monitor the market closely.Even if AVAX manages to avoid a significant price drop, the bearish divergence still serves as a warning sign. Avalanche 'bull trap' risks pushing AVAX price down by 30% in February Copy Link. Cointelegraph Subscribe. Collect. Share. WeChat.Traders should be prepared to adjust their positions based on evolving market conditions.

Long-Term Prospects for Avalanche: Beyond the Short-Term Volatility

Despite the potential for a short-term price correction, the long-term prospects for Avalanche remain promising. Avalanche 39;bull trap 39; risks pushing AVAX price down by 30% in FebruaryAvalanche boasts a fast, scalable, and secure blockchain platform that is well-suited for a variety of applications, including decentralized finance (DeFi), non-fungible tokens (NFTs), and enterprise solutions.The partnerships with Amazon and Intain could be a great indication of adoption for the future.As the blockchain ecosystem continues to grow and evolve, Avalanche is well-positioned to become a leading platform.

However, it's important to acknowledge the risks associated with investing in cryptocurrencies.The market is highly volatile, and prices can fluctuate wildly.Investors should only invest what they can afford to lose and should do their own research before making any investment decisions.

Analyzing the AVAX/USD Daily Price Chart in Detail

A closer look at the AVAX/USD daily price chart reveals some key insights. The price of AVAX has more than doubled in 2025, but a growing divergence between several key metrics hints at a bearish reversal ahead. Avalanche AVAX $21.23 bulls should brace themselves for impact led by a growing divergence between several key indicators on the daily-timeframe chart. AVAX price chart paints bearish divergence The daily AVAX chart shows a classic bearish divergence betweenThe chart clearly shows the bearish divergence between the price and the RSI.While the price has been making higher highs, the RSI has been making lower highs, indicating a weakening uptrend.

The chart also shows the successful closure above the descending trendline and the 200-day EMA.However, the subsequent price action has been lackluster, suggesting that the breakout might be a bull trap.It would be best to wait for the price to further break the $22.50 resistance and hold to confirm this is not a fakeout.

The volume has also been declining in recent days, further reinforcing the bearish outlook. Avalanche 'bull trap' risks pushing AVAX price down by 30% in February The price of AVAX has more than doubled in 2025 but a growing divergence between several key metrics hints at a bearish reversal ahead.If the volume continues to decline, it suggests that the rally is running out of steam and a price reversal is likely.

Practical Tips for Trading AVAX During Uncertain Times

Trading AVAX during uncertain times requires a disciplined approach and a clear understanding of risk management.Here are some practical tips for navigating the current market conditions:

Use Stop-Loss Orders: Protect your capital by setting stop-loss orders to limit potential losses.
Take Profits: Don't get greedy.Take profits when the price reaches your target level.
Avoid Overtrading: Resist the urge to trade frequently. Avalanche BINANCE:AVAXUSD bulls should brace themselves for impact led by a growing divergence between several key indicators on the daily-timeframe chart.AVAX price chart paints bearish divergenceThe daily AVAX chart shows a classic bearish divergence between its price and relative strength indexStick to your trading plan and avoid making impulsive decisions.
Stay Informed: Stay up-to-date on market news and trends.
Manage Your Emotions: Don't let your emotions cloud your judgment. Trusted News Discovery Since 2025. Global Edition. Saturday, MaTrade with a clear head and a rational approach.

Addressing Common Questions About the Potential AVAX Price Drop

Many investors have questions about the potential AVAX price drop. Get the latest Blockchain game news, project updates and analysis from top experts around the world. Check out our breaking NFT game news and analysisHere are some answers to common queries:

Will AVAX really drop by 30%?

While it's impossible to predict the future with certainty, the technical indicators suggest that a 30% price drop is a possibility. AVAX s price risks drop 30% in February. AVAX s price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponentialHowever, the actual decline could be more or less depending on market conditions and other factors.

Should I sell my AVAX holdings?

The decision to sell your AVAX holdings depends on your individual risk tolerance and investment goals. Posted by u/Cointelegraph_news - 2 votes and 1 commentIf you are concerned about potential losses, you might consider selling a portion of your holdings or setting stop-loss orders. Avalanche price risks drop 30% in February AVAX's price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponential moving average (200-day EMA; the blue wave) during the ongoing rally.If you are a long-term investor, you might choose to hold onto your AVAX and ride out the volatility.

Is now a good time to buy AVAX?

Given the potential for a price drop, it might not be the best time to buy AVAX.It's generally advisable to wait for confirmation of a bottom before entering a long position. 7.1M subscribers in the CryptoCurrency community. The leading community for cryptocurrency news, discussion, and analysis.However, if you are a long-term investor, you might consider buying AVAX at a lower price point if it does decline.

Conclusion: Navigating the Avalanche Waters with Caution

The impressive rally of AVAX in early 2025 has been met with caution as bearish signals emerge.The potential for a bull trap and a subsequent 30% price drop in February highlights the importance of risk management and informed decision-making.While the long-term prospects for Avalanche remain promising, investors should be aware of the short-term volatility and take steps to protect their capital. The price of AVAX rallied nearly 20% after the announcement. Avalanche price risks drop 30% in February. AVAX's price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponential moving average (200-day EMA; the blue wave) during the ongoing rally.By understanding the technical indicators, monitoring market sentiment, and implementing sound trading strategies, investors can navigate the Avalanche waters with greater confidence.

In conclusion, the key takeaways are:

A bearish divergence is forming on the daily AVAX chart, suggesting a weakening uptrend.
The recent breakout above key resistance levels could be a bull trap.
A 30% price drop is a possibility.
Implement risk management strategies, such as setting stop-loss orders.
Stay informed about market news and trends.

Remember to do your own research and consult with a financial advisor before making any investment decisions.Happy trading!