Avalanche (AVAX) has endured a challenging few months, but its defense of the $35 support zone is now pivotal for its future price trajectory. Over the past month, this level has been repeatedly tested, underlining its significance for traders and investors. A breach below $35 could open the door to a deeper decline, with $28.50 emerging as the next major support level.
Why the $35 Support Matters
The $35 level has acted as a critical price floor for AVAX, providing a stronghold amid bearish market sentiment. Analysts have warned that liquidation clusters below $34.72 could trigger a sharp sell-off, accelerating the descent toward $28.50. For bulls, holding this level is essential to maintain market confidence and potential upward momentum.
Correlation with Ethereum
AVAX has recently mirrored Ethereum’s (ETH) price movements, reflecting its dependence on broader market sentiment. However, Ethereum’s struggles to sustain bullish momentum have compounded challenges for AVAX, which has also failed to break through key resistance levels. This correlation highlights the influence of macro factors on AVAX’s short-term performance.
Encouraging On-Chain Metrics
Despite price volatility, Avalanche’s on-chain metrics provide some optimism. The total value locked (TVL) in its DeFi ecosystem has shown steady growth, signaling renewed interest in the network. Although TVL remains far from its 2021 peak of $11.44 billion, recent inflows into liquidity pools and staking opportunities suggest rising demand.
Additionally, the number of active addresses on Avalanche has surged from 3.42 million in May 2023 to 9.64 million in January 2025, showcasing increased user engagement. This growth in wallet activity could bolster long-term demand for AVAX.
While Avalanche’s development activity has slowed slightly since mid-2024, it remains above 2021 levels. This indicates ongoing innovation despite a temporary decline in developer participation.
Also Read: Avalanche (AVAX) Price Declines Amid Bearish Trends: Will It Retest $24 Support or Aim for $50?
Avalanche’s ability to defend the $35 support zone will be crucial in shaping its near-term price action. Positive on-chain indicators, such as rising TVL and active addresses, point to strong network fundamentals. However, failure to maintain $35 could result in a drop to $28.50, making this a key level to watch for investors seeking clarity on AVAX’s next move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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