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The cryptocurrency market is currently under significant pressure following a sharp decline of more than 8% in Bitcoin ($BTC ). This downturn was precipitated by U.S. President Donald Trump’s announcement of a 25% tariff on goods imported from Mexico and Canada, which has exacerbated the broader market sell-off and effectively erased the gains made during Sunday’s "crypto strategic reserve" surge. According to data from Coinglass, over $980 million in liquidations have occurred across the market within the past 24 hours.
Avalanche (AVAX) Under Intense Pressure
Within this volatile market environment, Avalanche (AVAX) has been hit particularly hard, experiencing a notable 13% decline over the last 24 hours. This recent drop extends AVAX’s ongoing correction to 35% over the past month, highlighting the substantial selling pressure currently facing the asset.
Testing Critical Support Levels
The weekly chart for AVAX reveals a persistent descending triangle pattern that has developed since the peak of the 2021 bull run. The most recent rejection at the upper resistance level of $55.79, which occurred on December 2, marked the initiation of a new and substantial downtrend.
In the wake of the tariff announcement, AVAX has dropped into a critical support zone, ranging between $17 and $23. At present, the price is fluctuating around the $20 mark, sitting within the middle of this key range. Historically, this area has served as a significant demand zone, often resulting in notable price rebounds.
Should AVAX succeed in holding above this support, a relief rally targeting the 100-day moving average could be expected. A decisive break above this moving average may pave the way for a return toward the upper resistance of the descending triangle, situated around $35. On the other hand, a failure to maintain this support level could lead to a deeper decline, with the next major support zone lying between $11 and $12.
Outlook: Rebound or Further Decline?
The immediate outlook for Avalanche remains uncertain, largely dependent on the broader market dynamics, particularly the movements of Bitcoin and Ethereum (ETH). Technical indicators, including the Moving Average Convergence Divergence (MACD), continue to signal bearish momentum, suggesting that the current downward trend may not yet have run its course. However, a potential bullish crossover in the coming weeks could signal the beginning of a reversal.
Investors and traders should monitor AVAX’s ability to defend its critical support zone. A successful defense could act as a catalyst for a substantial recovery, while a breakdown below these levels could increase the risk of further downside. As the market continues to digest the implications of the recent tariff announcement, AVAX's ability to hold its key support zone will likely play a pivotal role in determining its next major price movement.