AVAX drops 14% as short sellers dominate and whales stay quiet

The altcoin continued its slide over the last 24 hours, shedding 14% of its value as selling pressure swept across the crypto market. What's been somewhat ironic, though, is that the decline happened despite strong whale activity on the network. Normally, a bump in whale participation is treated like a bullhorn. So far, it hasn't exactly translated into price support.

On the daily chart, the altcoin broke past its key monthly support zone at $8.05 — a level that had held firm since February. The token's price action has dipped so aggressively that, at press time, it was trailing below key Exponential Moving Averages, the kind of technical setup traders usually prefer to avoid.

One likely culprit is the growing dominance of short sellers. More than 70% of press-time positions were shorts — a fairly blunt signal that most traders expect the slide to keep going. That kind of imbalance can pile on additional pressure, especially when buyers have been struggling to find any momentum.

Right now, the market sentiment around AVAX is straightforward: traders are more interested in protecting capital than chasing a rebound. Avalanche's total Open Interest dropped to around $159 million at press time, implying that fewer traders are willing to keep capital tied up in AVAX-related positions. In most cases, a fall in Open Interest during a sell-off points to weak conviction and declining participation.

That doesn't necessarily mean institutions are abandoning AVAX. It does, however, suggest that enthusiasm has cooled significantly compared to previous weeks. Institutions, like the rest of us, prefer to be early rather than embarrassed.

So here's the question on many traders' minds: whales have been active on the network, but the price keeps falling. There's no clear evidence of panic selling. Even so, the lack of aggressive accumulation suggests large holders aren't rushing to buy this dip — a classic case of "interesting, but not interesting enough."

As it stands, bears remain firmly in control. Until buying activity returns and sentiment improves, AVAX could struggle to break out of its prevailing downtrend.