- AVAX broke down from an ascending wedge, with RSI and MACD flashing bearish signals.
- On-chain activity surged 585% in 3 months, with transactions nearing 10 million daily.
- Derivatives data shows rising open interest near $730M, signaling heightened market activity.
Avalanche (AVAX) is back under pressure after breaking down from an ascending wedge that stretched from early August lows near $20.58 to a recent peak at $25.95. The downside break came near $24.10, shifting momentum sharply away from buyers and focusing on the next key support levels.
Technical analysis indicates that the RSI is leaning bearish at 37.69 and pointing downwards, implying that the token still has room to decline before hitting oversold conditions. Consequently, sellers can push on with the losses.
Source: TradingView
The Moving Average Convergence Divergence (MACD) also paints a cautious picture. The MACD line remains below the signal line, reflecting bearish momentum. At the same time, the histogram is contracting toward the zero line, hinting at a possible shift in momentum, but the token is still tilted in favor of the bears.
Attention now turns to the $21.93–$21.43 support range, which aligns with the 23.60% Fibonacci retracement level. This zone is considered crucial for halting the current decline. If bulls fail to defend this level, Avalanche risks slipping back toward the August floor at $20.58.
AVAX Network Thrives Despite Price Pressure
Despite the adverse price action, AVAX is showing remarkable strength on-chain, with transaction counts soaring to record levels. Data from DefiLlama highlights that activity has surged by an impressive 585% in just three months since May. This growth signals that while token prices may face selling pressure, network demand is building at a rapid pace.
Source: X
On-chain volume has consistently expanded, pushing daily transactions close to the 10 million mark. This sharp rise underscores Avalanche’s increasing role as a hub for decentralized finance and applications. It also suggests that developers and users continue to migrate to the network for faster and cheaper execution compared to competitors.
Meanwhile, Avalanche announced another milestone on Wednesday, stating that $300 million has been added in real-world assets (RWAs) tokenized on its blockchain. The development comes through SkyBridge, which is moving its flagship funds on-chain in collaboration with Tokeny Solutions and Apex Global Group.
This expansion marks a significant step in connecting institutional capital with blockchain infrastructure, reinforcing Avalanche’s positioning as a bridge between traditional finance and decentralized ecosystems.
AVAX Derivatives Show Signs of Sentiment Shift
Similarly, on-chain data continues to highlight a critical turning point for Avalanche (AVAX) as momentum builds across derivatives markets. The latest funding rate at 0.0024% reflects increasing confidence from long traders, signaling that bullish appetite is slowly outweighing bearish pressure. If sustained, this shift could spark a broader reversal, particularly as traders eye key liquidation levels.
Source: CoinGlass
Should AVAX push higher and trigger this liquidation zone, the resulting squeeze could amplify buying momentum and accelerate a rally. At the same time, a sizeable pocket of long positions—138.98K tokens—is concentrated near the $20.38 area. This suggests firm conviction from bulls at lower levels, reinforcing the zone as a critical defense line.
Any dip toward this region could attract renewed buying interest, balancing the risks of further downside. Open interest adds another layer to the outlook, now approaching $730 million. Rising OI indicates heightened participation and stronger conviction among traders, but it also sets the stage for increased volatility as both sides position aggressively.
Related: Review on AVAX: Unique Architecture & Consensus Mechanism
Conclusion
Avalanche (AVAX) presents mixed signals, balancing short-term weakness against long-term strength. On the technical front, indicators warn of pressure ahead, with support zones critical in preventing a deeper pullback. But beneath price charts, labeling activity in the network paints a different picture.
Transaction volumes are increasing at a rapid pace, real-world assets are undergoing tokenization, and institutional partnerships are increasingly enhancing Avalanche’s role as a bridge between traditional finance and blockchain.
Derivatives markets add yet another layer of momentum, with funding rates and open interest suggesting growing conviction. Together, these dynamics highlight a network under pressure but steadily building the foundations for lasting adoption.
