AVAX futures open interest rises 8% despite price decline

Avalanche's futures market is displaying a compelling divergence between price action and trader positioning. While AVAX declined in recent sessions, open interest in futures contracts surged 8%, signaling robust institutional and retail accumulation despite bearish price movements.

This disconnect reveals critical market dynamics. When open interest rises during price declines, it typically indicates sophisticated traders establishing long positions at lower valuations, anticipating mean reversion. The AVAX data corroborates this thesis, with trading volume averaging 1.39 million tokens daily across major exchanges, demonstrating sustained liquidity despite price weakness.

The 8% open interest increase contrasts sharply with broader market conditions, where many altcoins experienced liquidations. AVAX's current price of $13.45 represents a 74.42% decline from its yearly peak, creating attractive entry points for long-term investors. This futures expansion suggests institutional confidence in AVAX's recovery potential, particularly as the Bitwise Avalanche ETF awaits SEC approval.

Technical support levels at $12.57 remain robust, while resistance at $14.77 attracts breakout traders. The combination of rising open interest and established support zones indicates a potential accumulation phase preceding significant price appreciation, rewarding patient market participants positioning ahead of anticipated catalysts.

Funding rates remain positive, indicating bullish sentiment

Avalanche's derivatives market data reveals strong bullish positioning that underpins recent price momentum. Funding rates have remained consistently positive, reflecting widespread optimism among leveraged traders betting on continued upside movement. This positive funding rate environment indicates that long positions are willing to pay premiums to maintain their exposure, a classic signal of bullish market sentiment.

Capital.com's client positioning data from September 22, 2025 demonstrates this bullish bias clearly. Long positions accounted for 95.6% of total AVAX CFD positions, while short positions represented only 4.4%. Such skewed positioning reveals overwhelming consensus among traders anticipating price appreciation rather than decline.

The technical setup further validates this sentiment. AVAX trades above its critical moving-average cluster, with the 20-day average positioned above the 50-day, 100-day, and 200-day averages at $29, $26, and $23 respectively. This bullish alignment provides technical confirmation of the positive momentum captured in funding rates.

Market participants are pricing in several catalysts supporting this optimistic outlook. Institutional adoption through real-world asset integration, network upgrades improving throughput and reducing fees, and potential ETF approvals represent factors justifying the sustained positive funding environment. The combination of positive funding rates, extreme bullish positioning, and supportive technical structure creates a cohesive narrative of strengthening upward momentum for AVAX.

Put/call ratio above 1.5 suggests potential capitulation

When the put/call ratio for AVAX options reaches above 1.5, it signals a critical market sentiment shift toward bearish positioning. This metric, calculated by dividing total put options volume by call options volume, reveals that investors are placing significantly more downside bets than upside bets. Such elevated ratios often coincide with market capitulation events, where panic selling reaches extremes.

Historical patterns across broader markets demonstrate that put/call ratios exceeding 1.5 frequently mark inflection points preceding market recoveries. During these periods, accumulated selling pressure from retail and institutional traders creates conditions for potential reversals. The data suggests that when sentiment becomes this pessimistic, most negative news has already been priced into AVAX.

To confirm genuine capitulation beyond the put/call ratio alone, traders should monitor complementary indicators including options skew patterns, open interest levels, and liquidation volumes. High open interest concentrated in put options, combined with increasing skew toward downside protection, validates the capitulation thesis. Funding rates and liquidation cascades provide additional confirmation—extreme negative funding rates indicate overleveraged short positions vulnerable to rapid reversals.

Understanding these interconnected signals enables traders to distinguish between temporary pullbacks and genuine capitulation events offering strategic entry opportunities.

Liquidation data shows $2.11 drop triggered cascade of forced closures

2025 AVAX Price Collapse: Understanding the $2.11 Liquidation Cascade

In 2025, Avalanche (AVAX) experienced a severe market correction that triggered unprecedented liquidations across the cryptocurrency market. A sharp $2.11 price decline within a short trading window catalyzed a domino effect of forced position closures, wiping out $222 million in market value.

The liquidation mechanics unfolded as follows: leveraged traders holding AVAX positions at various price levels found their collateral insufficient to maintain margin requirements. As the price breached critical support levels, automated liquidation protocols activated simultaneously, forcing mass closure of overleveraged positions at unfavorable execution prices.

This cascading liquidation effect demonstrates the inherent risks within leveraged trading ecosystems. The AVAX price decline extended 27 percent in recent trading sessions, transforming what began as a technical pullback into a systemic liquidity crisis. Traders with 5x to 10x leverage faced instantaneous margin calls, unable to react quickly enough to deposit additional collateral.

The incident underscores critical risk management principles: position sizing matters enormously in volatile markets, and leverage amplifies both gains and losses exponentially. Data from on-chain analysis platforms revealed significant concentration of liquidations at specific price points, indicating clustered stop-loss triggers among institutional and retail traders alike, thereby intensifying downward pressure and perpetuating the liquidation spiral.

FAQ

Is AVAX Coin a good investment?

Yes, AVAX is a promising investment. With its strong technology and growing ecosystem, AVAX is poised for significant growth in the coming years. Experts predict it could reach $500 by 2026.

Can AVAX reach $100?

Yes, AVAX could reach $100. Experts predict it may hit $185.66 by 2029 and average $779.28 in 2033, suggesting strong long-term growth potential.

Does AVAX Coin have a future?

Yes, AVAX Coin has a promising future. Its market position remains strong, driven by continued growth, adoption, and innovation in the blockchain space.

What is AVAX coin?

AVAX is the native token of the Avalanche blockchain, used for transaction fees and network security. Avalanche is a third-generation blockchain with faster transactions and lower fees, supporting decentralized applications and custom blockchain networks.