The price of Avalanche has fallen to a pivotal support level, generating an early bullish indicator that suggests a possible recovery.
Avalanche (AVAX) has plummeted to the significant support level of $20, which marks a decline of over 65% from its peak in December.
This recent downturn is primarily a reflection of the overall state of the cryptocurrency and stock markets, where risk appetite has deteriorated. Bitcoin (BTC) and most altcoins have entered a technical bear market this year.
Two major concerns currently affecting the markets include proposed tariffs from Donald Trump and rising anxiety that the artificial intelligence bubble may be starting to deflate.
Meanwhile, Avalanche has been consistently losing its market share to emerging layer-1 projects such as Berachain, Base, Arbitrum, and Sui. Its total value locked is currently at $1.66 billion, significantly trailing behind Berachain’s $3.1 billion and Base’s $2.95 billion. At its zenith, Avalanche boasted over $12 billion in assets.
Additional network statistics indicate that Avalanche’s application revenue has worsened in recent months, bringing in only $430,000 in March, a drastic drop from its peak of $52 million in December 2023.
Despite this, Avalanche has garnered some positive attention. Recently, Sumitomo Mitsui Financial Group, Japan’s second-largest bank, chose it to supply the blockchain infrastructure for its impending stablecoin.
There are also hopes surrounding the approval of a spot AVAX ETF by the Securities and Exchange Commission. Should it be approved, this fund would give U.S. investors access to AVAX. However, it is uncertain if this will spark investor interest, given recent data that shows a strong preference for spot Bitcoin ETFs.
Technical Analysis of Avalanche Price
The weekly chart reveals that AVAX has reached the critical psychological level of $20, a significant support area that held in September of last year and led to a 195% rebound.
Avalanche is showing a falling wedge pattern, a well-regarded bullish reversal indication. This pattern comprises two descending, converging trendlines and frequently precedes an upward breakout. If this happens, the next resistance level to monitor will be at $30.
Conversely, a decisive break below the $20 support could indicate further decline, with the next notable support level at $9, which represents its lowest point in 2023.