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AVAX – Is it time to bet against it after its drop to $54?

Press Releases Crypto News AMB-Crypto AVAX – Is it time to bet against it after its drop to $54?

AVAX’s instability caused many long liquidations.
If the price hit $58.23, another decline might occur.

It was not good news for traders who opened long Avalanche [AVAX] positions on the 27th of March. According to data from Coinglass, contracts valued at $316,200 were wiped out in the last 24 hours.

Out of these positions, longs accounted for $277,890 while short liquidations stood at $38,310. Liquidation occurs when an exchange forcefully closes a trader’s position.

Source: Coinglass

This happens when the trader does not have the minimum collateral to keep the position open. Other times, the market moving in the opposite direction to the predicted one could trigger it.

Quick swings are bad

For AVAX, a large part of the extermination could be linked to its price action. At press time, AVAX changed hands at $54.60. But on the 27th of March, the price almost reached $55 before volatility hit the market and it retraced to $53.81 in less than two hours.

Furthermore, AMBCrypto evaluated the Long/Short Ratio. The metric indicates if investors have a positive or negative expectation about an asset’s price.

If the value is over 1, then the sentiment is largely positive and traders are expecting a price increase. However, values less than 1 indicate a negative sentiment.

At press time, AVAX’s Long/Short Ratio was 0.95, indicating that the average sentiment was bearish.

When we looked at the metric further, we discovered that only 8% of traders were very bullish on the cryptocurrency. However, a whopping 33% were betting on the price to decrease. The rest were either neutral, slightly bullish, or bearish.

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Author: Victor Olanrewaju

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