Avalanche's Descent: Bearish Tech vs. $1B Treasury and ETF Hopes

Avalanche (AVAX) declined 7.1% to $34 in the latest CoinDesk 20 performance update, dragging the broader crypto index lower as market sentiment shifted amid mixed institutional and technical signals. The token’s price drop followed a pullback from a 30-day high of $36.50, with analysts attributing the decline to profit-taking after a 30% rally in the preceding 60 days. AVAX’s market capitalization currently stands at $14.6 billion, ranking it 13th on CoinMarketCap, while 24-hour trading volume reached $2.7 billion, reflecting sustained liquidity despite the recent dipAvalanche (AVAX) Snapshot – Price Dynamics: InsideBitcoins^[1].

The sell-off coincided with a critical breakdown in technical indicators. The Money Flow Index (MFI) for AVAX fell below the 50.00 neutral threshold, signaling reduced buying pressure and heightened selling dominance. On the daily chart, the Supertrend indicator turned red above the price, reinforcing bearish momentum. Additionally, the Moving Average Convergence Divergence (MACD) remained in negative territory, suggesting ongoing bearish biasWill AVAX Price Drop Below $20 After Losing Key …^[3]. Key support levels at $30 and $26 are now in focus, with further declines potentially testing $22 as a critical psychological floorAvalanche (AVAX) Snapshot – Price Dynamics: InsideBitcoins^[1].

Institutional developments, however, have introduced a layer of complexity. The Avalanche Foundation’s $1 billion treasury initiative, launched in early September, aims to create sustained AVAX demand through discounted token purchases by two U.S.-based crypto treasury firms. One of these, led by Hivemind Capital and advised by Anthony Scaramucci, secured $550 million in funding via a Nasdaq-listed entity, AVAX OneAvalanche Defies Crypto Market Dump With 10% Gains^[2]. Meanwhile, VanEck and Grayscale have advanced proposals for AVAX ETFs, with the latter seeking to convert its Avalanche Trust into a spot ETF. Analysts estimate a 90% approval likelihood for major AVAX ETFs by late 2025, though regulatory delays could trigger volatilityAvalanche (AVAX) Snapshot – Price Dynamics: InsideBitcoins^[1].

Ecosystem growth remains a bullish catalyst. The Octane upgrade in April slashed C-Chain fees by 98%, propelling daily transactions to 1.4 million in Q2—a 493% quarter-over-quarter surge—and total value locked (TVL) to $2.23 billion as of late August. Stablecoin market cap on Avalanche also rose 81% in 30 days to $2.16 billion, driven by protocols like AaveAvalanche Defies Crypto Market Dump With 10% Gains^[2]. Coin Bureau highlighted a record $1 billion decentralized exchange (DEX) volume spike in early September, marking Avalanche’s largest daily trading surge in 18 monthsAvalanche (AVAX) Snapshot – Price Dynamics: InsideBitcoins^[1].

Price projections remain divided. A rounded bottom pattern on the daily chart suggests potential for a 61% rebound to $55 or a 511% rally to $212, contingent on sustained buying pressure above $36 resistanceAvalanche Defies Crypto Market Dump With 10% Gains^[2]. Conversely, bearish forecasts warn of a possible drop to $17.33 if the $30 support level fails, citing overbought RSI readings and historical corrections following similar technical setupsWill AVAX Price Drop Below $20 After Losing Key …^[3].

The SEC’s decision on AVAX ETF applications, expected by late September, will be pivotal. A successful approval could unlock billions in institutional liquidity, mirroring Bitcoin and Ethereum’s ETF-driven trajectories. However, delays or rejections may exacerbate near-term volatility, particularly as token unlocks and profit-taking pressures buildAvalanche (AVAX) Snapshot – Price Dynamics: InsideBitcoins^[1]. With Avalanche’s subnet activity growing and enterprise adoption expanding—including Toyota’s mobility finance tests and FIFA’s NFT ticketing exploration—the long-term trajectory hinges on maintaining momentum above $35Avalanche (AVAX) Snapshot – Price Dynamics: InsideBitcoins^[1].