Is AVAX Facing a Critical Bearish Turn? A Deep Dive into Short Pressure, Liquidation Risks, and Technical Signals

Avalanche (AVAX) has long been a bellwether for crypto market sentiment, but November 2025 is shaping up to be a pivotal month. The asset is caught in a tug-of-war between bearish exhaustion and latent bullish potential, with technical indicators, on-chain metrics, and liquidation risks painting a complex picture. For traders, understanding this dynamic is critical to navigating what could be a volatile period.

The Bearish Case: A Perfect Storm of Short Pressure and Selling Exhaustion

AVAX has been trading within a descending channel on the four-hour chart since October 2025, with recent price action hitting the upper boundary and forming bearish candlestick patterns, such as the shooting star and dark cloud cover, according to AmbCrypto. These patterns signal strong selling pressure as buyers fail to push the price above key resistance levels.

On-chain data amplifies the bearish narrative. Over the past week, AVAX has seen taker sell orders dominate, indicating widespread short-term pessimism, according to AmbCrypto. Traders are heavily over-leveraged at critical levels: $16.79 and $17.65, where $4.15 million in short positions far exceed $1.07 million in longs, according to AmbCrypto. This imbalance suggests a high probability of further downside if the price breaks below these levels.

Liquidation risks are also mounting. A major whale who previously shorted BTC via Hyperliquid has seen $6.44 million in losses after multiple stop-loss triggers, leaving only $560,000 in remaining capital, according to Bitget. Such high-profile liquidations highlight the fragility of leveraged positions in AVAX, which could cascade into broader market panic if the asset continues its slide.

Fibonacci Levels and the Path to $8.72: A Deep Discount Zone

Fibonacci retracement levels offer a roadmap for AVAX's potential trajectory. The 0.786 level near $8.72 has historically acted as a turning point during bear market cycles, according to CryptoNewsLand. Analysts label this zone a "smart money buy zone," where institutional investors often accumulate during prolonged drawdowns, according to CryptoNewsLand. However, reaching this level would require AVAX to fall an additional 18% from current levels, breaching the $18 support threshold, according to AmbCrypto.

The $8–$12 range is particularly significant. Similar patterns in past crypto cycles have seen assets rebound sharply after hitting these depths, driven by opportunistic buying from large-cap investors, according to CryptoNewsLand. For now, though, AVAX remains trapped in a bearish momentum phase, with traders aggressively shorting the asset, according to AmbCrypto.

A Glimmer of Hope: Volume Surges and Potential Breakouts

Despite the bearish headwinds, AVAX has shown signs of resilience. Trading volume surged by $1.8 billion in the past month, signaling increased market participation and a potential structural breakout, according to BraveNewCoin. A rebound above $17.80-a 7.3% gain in 24 hours-has already demonstrated renewed buying pressure, according to BraveNewCoin.

If AVAX can break above the $18.60–$20 resistance zone, it could rally toward $23–$25, with long-term targets at $30–$35 and even $55–$60, according to BraveNewCoin. This scenario hinges on maintaining strength above $17.50 and breaking out of the broader descending channel, according to BraveNewCoin. For traders, this creates a high-risk, high-reward setup: short-term bearish bets could be hedged with long positions if key support levels hold.

Strategic Positioning for Traders

For those leaning into the bearish case, short positions at $16.79 and $17.65 remain attractive but carry liquidation risks. Stop-loss orders should be placed above $18.59 to mitigate sudden rebounds. Conversely, traders with a longer-term bullish bias might consider accumulating near the $8.72–$12 zone, where historical data suggests strong institutional interest, according to CryptoNewsLand.

The coming weeks will be critical. Upcoming token unlocks could introduce further volatility, testing AVAX's ability to hold key levels, according to Bitget. For now, the market is in a state of flux-neither a full-blown bear market nor a definitive bullish breakout.

Conclusion

AVAX is at a crossroads. While short-term bearish momentum and liquidation risks dominate, the asset's technical and on-chain fundamentals suggest a potential for both further declines and a sharp rebound. Traders must remain agile, balancing caution with opportunism as the market navigates this pivotal phase.