Avalanche (AVAX) has faced a tough few months, but its defense of the $35 support zone remains a crucial factor in determining its future price movements. Over the past month, the price has consistently tested this level, highlighting its significance for both traders and investors. If AVAX fails to maintain this crucial support, a further decline to $28.50 could be in store.
The $35 price level has proven to be a critical point for AVAX in recent weeks. A recent report noted that liquidation clusters below the $34.72 mark could trigger a sharp sell-off, pushing the price even lower. If this happens, the next significant support zone lies around $28.50. As a result, the $35 level is now a key battleground for bulls attempting to maintain upward momentum.
In terms of market correlation, AVAX has been moving in tandem with Ethereum (ETH) lately. However, Ethereum itself has faced struggles, with limited bullish momentum in recent weeks. This has also reflected in AVAX’s price performance, as the altcoin has been unable to break above crucial resistance levels. The close relationship between AVAX and Ethereum’s price movements suggests that the broader market sentiment will play a big role in AVAX’s future.
Despite recent price challenges, on-chain activity for Avalanche has shown some promising signs. For example, the total value locked (TVL) in Avalanche’s DeFi ecosystem has been steadily growing. While TVL is still far from its peak of $11.44 billion in 2021, recent increases in TVL point to potential future demand for AVAX. Notably, the large positive inflows observed two weeks ago could indicate a rising level of capital and assets being added to Avalanche’s liquidity pools or staking opportunities, which is a good sign for the long-term health of the network.
In addition to TVL growth, Avalanche has also seen a rise in the number of new and active addresses on its network. From May 2023 to January 2025, the number of non-zero balance addresses on Avalanche has surged from 3.42 million to 9.64 million. This growth in wallet activity could indicate increasing demand for AVAX, as more users engage with the network. If this trend continues, it could support price growth in the long term.
While on-chain metrics are generally positive, it’s worth noting that Avalanche’s core development activity has slowed slightly since June 2024. Developer numbers and the frequency of commits have declined, which may raise concerns for some investors. However, it is important to recognize that development activity remains above 2021 levels, which could signal that the platform still has significant potential for future growth.
Overall, AVAX’s future price trajectory depends on the outcome of its battle to defend the $35 support level. Positive on-chain metrics such as rising TVL, active addresses, and whale inflows indicate that there is still demand for AVAX. However, the platform’s ability to maintain this support level and rebound from current price levels will determine its ability to reclaim bullish momentum.
In summary, as long as Avalanche can hold the $35 mark, the chances for a price recovery remain intact. However, failure to defend this level could result in significant downward pressure, pushing the price toward $28.50. Investors will need to closely monitor the price action around this critical support zone to gauge AVAX’s next move in the market.
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