Avalanche ( AVAX ) lost the $24 mark, negative signals cast a shadow over the market.

Avalanche (AVAX) extended the bearish streak in Tuesday's trading session, after losing nearly 6% just a day prior. Derivative market data reflects an increasingly pessimistic sentiment, as the funding rate reversed to a negative level and the number of short sell orders surged. At the same time, technical signals continue to indicate weakening momentum, implying the risk of a deeper correction in the short term.

The derivative and on-chain data of Avalanche leans towards a bearish trend

According to the OI-Weighted Funding Rate data from Coinglass, the number of traders betting on the bearish Avalanche scenario currently outweighs those who expect a rebound.

Notably, this index fell into negative territory during Monday's trading session, meaning that short positions are forced to pay fees to those holding long orders. Historical statistics show that each time the funding rate shifts from positive to negative, AVAX often experiences subsequent sharp declines.

Funding rate chart AVAX | Source: CoinglassThis trend is further reinforced as the Long-to-Short ratio on Coinglass fell to just 0.84 on Tuesday – the lowest level in a month. The ratio falling below the threshold of 1 reflects a bearish sentiment, with the majority of investors believing that the asset price will continue to fall.

The Long-to-Short ratio of AVAX | Source: CoinglassAt the same time, data from CryptoQuant also paints a similar picture. The Taker CVD (Cumulative Volume Delta) of AVAX continues to plunge deep into negative territory, indicating that the market is in a "Taker Sell Dominant" state – meaning the bears are in control.

Taker CVD indicator of AVAX | Source: CryptoQuant## Some optimistic signals

Although the derivative and on-chain data paint a rather gloomy picture, Avalanche still shows some positive signals. Recently, JPYC Co., Ltd. announced that they have become the first remittance company in Japan to issue a stablecoin pegged to the Yen (JPY) at a 1:1 ratio.

Notably, the stablecoin JPYC will be launched simultaneously on three blockchains: Ethereum, Avalanche, and Polygon.

This move is seen as a long-term boost for Avalanche, as the integration of stablecoins into the AVAX ecosystem not only expands practical applications but also enhances usability, thereby promoting the widespread adoption of the native token.

Avalanche Price Prediction: Momentum Indicators Show Weakness

The price of Avalanche (AVAX) continues to be under selling pressure as it extends the bearish trend from the beginning of the week, currently approaching the 50-day exponential moving average (EMA) at the level of 22.74 USD.

In the event that AVAX closes below this important threshold, the bearish trend may be triggered more strongly, bringing the price to test the weekly support area at 20.99 USD.

Daily AVAX/USDT chart | Source: TradingViewTechnical indicators are signaling unfavorable conditions: the daily RSI has dropped to 48, slipping below the neutral level of 50, indicating that bearish momentum is prevailing. At the same time, the MACD recorded a bearish cross signal( on Tuesday, further reinforcing the outlook for a deeper correction.

However, if the demand returns, the recovery scenario is still open. At that time, AVAX may extend its upward movement towards the next important resistance area at 26.46 USD.

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