Avalanche [AVAX] Price Plunges as Bearish Market Sentiment Gains Strength

Avalanche's [AVAX] token price fell by 4.91% in the past 24 hours, making it one of the biggest price drops among top 35 crypto assets by market capitalization.

This decline came alongside a rise in Open Interest and falling spot prices below $6.50 local support zone, with negative funding rates indicating heightened short-selling.

The recent bearish trend has been ongoing, with the altcoin's price stalling despite a 20x surge in daily transactions onchain and a long-term downward price trend.

The loss of the $6.50 support zone could push prices toward and below $6.0 next, but traders should be cautious of potential short squeezes that may pull prices upward briefly before continuing the bearish trend.