AUS
NZ
UK
CA
USA
IND
Highlights
- AVAX's defense of the $35 support level is key to its short-term price movements.
- On-chain activity shows promising signs despite recent price struggles.
- A decline below $35 could result in a further drop toward $28.50.
Avalanche (AVAX) has faced a challenging few months, with price fluctuations causing concern among the community. However, the $35 support zone has proven to be a crucial level, repeatedly tested in recent weeks. This level is now a critical point for traders and market participants, as it could dictate the asset's future price movement. If AVAX fails to hold the $35 support, further declines to $28.50 may follow, signaling additional downside risks for the asset.
The $35 price level has gained significance due to its repeated interaction with AVAX’s price in recent weeks. A recent report highlighted that liquidation clusters below $34.72 could trigger a sharp sell-off, pushing the price even lower. This further underlines the importance of the $35 support zone as a battleground between bulls and bears. If this level holds, AVAX could regain momentum, but failure to defend it could lead to further price deterioration.
Avalanche's correlation with Ethereum (ETH) has been evident in recent market behavior. As ETH continues to struggle with limited bullish momentum, AVAX has mirrored these struggles, unable to break above crucial resistance levels. The close relationship between AVAX and Ethereum indicates that broader market sentiment will play a significant role in determining AVAX's future price movements. Any bullish momentum from Ethereum could also benefit AVAX, while a continued lack of upward pressure in the broader market could hinder AVAX’s recovery.
On-chain metrics, however, tell a more promising story. Avalanche’s DeFi ecosystem has seen an increase in its total value locked (TVL), signaling potential demand for AVAX in the long term. Although TVL is still far from its 2021 peak, the recent growth suggests a growing interest in the Avalanche network. Notably, large positive inflows observed in recent weeks hint at a rising level of capital being added to Avalanche’s liquidity pools and staking opportunities. This shows that, despite price struggles, there is still interest in the ecosystem, which could provide a foundation for future growth.
Despite the positive on-chain activity, development progress on the platform has slowed slightly since mid-2024. A decrease in developer engagement and the frequency of commits raises questions about the pace of growth on the network. However, it’s important to note that development activity remains higher than in 2021, indicating that Avalanche still has substantial potential for growth and innovation.
Moving forward, the key factor for AVAX will be whether it can maintain the critical $35 support level. The increasing TVL, growing user base, and whale inflows provide positive signs, but the price action at this support zone will be the deciding factor for the asset's near-term trajectory. If the $35 support holds, a price recovery remains a possibility. However, failure to defend this level could result in significant downward pressure, pushing the price toward $28.50.
Avalanche's ability to maintain the $35 mark is crucial for its short-term price outlook. Positive on-chain data suggests that demand for AVAX remains intact, but the price action around this support zone will ultimately determine if the asset can regain bullish momentum or if further declines are on the horizon.
