Avalanche (AVAX) has been struggling as it drops below the $27 mark, continuing its downward trajectory. Analysts are predicting a potential crash toward the $20 range, as the bearish pressure surrounding the token intensifies. While the broader altcoin market is bracing for a reversal rally, blue-chip tokens like Avalanche continue to face significant challenges.

Avalanche’s Price Struggles

Avalanche has experienced a sharp decline over the past week, with its value decreasing by 18.3%. In the past 24 hours alone, AVAX dropped by 3.6%, bringing its market cap below $11 billion. Currently trading at $26.90, Avalanche’s bearish performance has raised concerns about further losses, with some experts predicting the token could dip under $20.

Technical Analysis Points to Continued Downtrend

A closer look at Avalanche’s price chart shows a bearish breakdown of a local support trendline, which had been part of a falling-channel pattern. On February 2, AVAX saw a dramatic 14.95% drop, followed by a breakdown below the critical 61.8% Fibonacci level at $28.91. This marks a significant shift, as the support trendline failed to hold, leading to a further decline in the token’s value.

Since the formation of a morning star pattern near $34.34, Avalanche has shed 21.66% of its market value over the past five days. The downtrend continues, and with the price approaching the 78.60% Fibonacci level at $24.34, a bearish continuation seems likely. Despite a brief 1.4% intraday recovery, the bearish trend remains strong, suggesting that Avalanche may face further losses.

Indicators Signal Further Decline

Technical indicators point to an ongoing bearish environment for AVAX. The Trend Strength Index (TSI) has dropped to -0.89, indicating a strong bearish trend. Additionally, the lower Bollinger Band has been significantly affected, and the 20-day EMA line has fallen sharply, further confirming the downtrend.

With the 61.8% Fibonacci level at $28.91 acting as a crucial resistance zone, it remains a key level to watch. A potential rise above this level could signal a shift in momentum, but for now, the bears seem firmly in control.

Analyst Predicts $20 Target

Crypto analyst Ali Martinez has highlighted the risk of a deeper decline for Avalanche. According to Martinez, a breakdown in the current triangle pattern on the 5-minute chart could push AVAX closer to the $20 mark. This would place the next major support level around $19.55, suggesting that the $20 psychological barrier may be the next significant target.

Martinez’s analysis points to a potential further dip below the 78.60% Fibonacci level at $24.34. If this happens, the $19.55 support level would be the next major line of defense. A failure to hold this support could accelerate the downtrend and push AVAX further toward $20 or even lower.

Conclusion

Avalanche (AVAX) has faced significant downward pressure recently, and technical indicators suggest that the token may continue to decline in the short term. If the bearish momentum persists, AVAX could reach the critical $20 level, with potential for further losses below that. Traders and investors should closely monitor the $24.34 and $19.55 support levels for signs of reversal or further breakdowns.