Avalanche (AVAX) has faced significant challenges over the past two weeks, with its price dropping by 25%. Despite attempts to reclaim the crucial $20 mark, the cryptocurrency has struggled to break through this resistance, leading to a stalled recovery. As of now, AVAX is trading at $17.19, far from the key $20 level that has become a significant barrier.

Bearish Market Trends and Weak Momentum

AVAX’s price has been trapped below the $20 mark after a sharp decline that followed a failed attempt to break through the $22.87 resistance level. Although the selling pressure has decreased, there is still a lack of strong bullish momentum, preventing any substantial price recovery.

One of the key factors contributing to the difficulty in achieving a rebound is the current state of market sentiment. The Relative Strength Index (RSI) has recently dipped back into bearish territory, signaling weak buying interest and reinforcing the idea that AVAX remains vulnerable to further declines. The RSI is a key technical indicator used to measure the strength of an asset’s price movement. When it’s in the bearish zone, it suggests that there’s a lack of buying pressure, making it harder for the asset to gain traction and move upward.

This persistent weakness has resulted in a period of consolidation below $20, with AVAX unable to generate significant upward momentum. This lack of support from the broader market suggests that AVAX may continue to struggle in the short term, with the potential for further declines.

Investor Behavior and Low Selling Pressure

Despite the negative price action, there is a silver lining for Avalanche. Less than 3% of current AVAX holders are in profit, which means most investors are holding on to their positions and not selling at a loss. This behavior, known as “HODLing,” can be seen as a positive sign, as it reduces the downward pressure on AVAX’s price.

The fact that most holders are not actively selling their positions indicates that they are waiting for a recovery. This type of investor patience could provide some stability to the price, as fewer sellers in the market mean less pressure on AVAX to continue dropping. If broader market conditions improve, the patience of these holders could help Avalanche form a stronger base and set the stage for a future price rebound.

However, the overall lack of bullish buying pressure still casts doubt on any immediate recovery. With the RSI in bearish territory and the overall market sentiment leaning negative, AVAX needs more than just a reduction in selling to turn its price around.

Potential Price Levels to Watch

At its current price of $17.19, AVAX is approaching a critical level of support. If the coin fails to hold above $18.27, it could slide further, with the next key support level sitting at $16.25. A drop to this level would extend the downward trend and lead to deeper investor losses.

On the upside, AVAX would need to flip the $19.86 level into support in order to signal a shift in market sentiment. A successful bounce from this level could pave the way for a rally toward $22.87, where it previously faced resistance. Reclaiming this price point would restore investor confidence and could lead to a more sustained recovery for Avalanche.

Conclusion: Struggling to Gain Traction

Avalanche (AVAX) continues to face a challenging market environment, struggling to regain momentum after its price drop. While investor patience has reduced downward pressure, the lack of strong buying interest and the persistent bearish trends indicate that AVAX’s path to recovery may be slow.

With the price currently trapped below $20, it’s unclear when or if AVAX will manage to break free of its downtrend. Investors will need to monitor key technical indicators, such as the RSI and price support levels, to assess the potential for a rebound. For now, AVAX remains vulnerable to further declines unless stronger buying pressure emerges to turn the tide.