Avalanche: Is a 30% drop next as AVAX fails at KEY support?

Avalanche [AVAX] fell 3.75%, at press time, marking its second straight daily decline and signaling the potential for further losses.Price action and derivative data suggest additional downside may be ahead. According to CoinMarketCap, AVAX trading volume surged over 18% to $265 million.Rising volume during a price decline typically reflects strengthening bearish momentum, indicating that traders and investors are aligning with the downward trend.A possible 30% decline for AVAXLooking at the weekly chart, it appears that AVAX has been struggling to reclaim its key support level of $8.50 after attempting to move back above it. On the 2nd of February 2025, the asset fell below this level but recovered after strong buying activity. However, this time it has failed to do so.Source: TradingViewBased on the current price action, if AVAX’s weekly and daily candles close below the key level of $8.50, it could experience a sharp decline of 30% and potentially reach the $5.69 level. However, this bearish outlook would be invalidated if the price moves back above the $8.50 level.At press time, the Average Directional Index (ADX), an indicator that measures the strength of a trend, has reached 36.93, well above the key threshold of 25. This indicated that AVAX has strong directional momentum.Amid this decline and bearish price action, a well-followed crypto analyst shared a post along with a video stating that AVAX has broken down from a bearish flag pattern and is poised to hit the $6.55 level in the coming days.Traders eyes on short-leveraged positionsBesides the price action and predictions, another factor currently strengthening this bearish view is the derivative analytics tool CoinGlass.The latest AVAX exchange liquidation map shows that intraday traders are heavily targeting two key levels: $8.04 on the downside and $8.59 on the upside. These levels hold the highest concentration of positions.In addition, the data reveals that traders have built $2.19 million in long‑leveraged positions and $3.46 million in short‑leveraged positions. Together, this positioning highlights the strong bets being placed around these price points.Source: CoinGlassThese positions indicate that intraday traders are strongly following the prevailing market trend and largely believe that the AVAX price is unlikely to cross the $8.59 level anytime soon.Final SummaryAVAX appears to be failing to hold its key support level of $8.50.Intraday traders are strongly betting on short positions, while experts suggest that AVAX is poised to hit the $6.55 level.