Avalanche Gains Traction as ETF Proposal and Staking Spark Bullish Momentum

Avalanche (AVAX) continues to attract attention from investors as the token's price rose nearly 2% in early December. The surge follows a record high in active addresses on the Avalanche network, signaling increased on-chain activity. With the network approaching 444 million unique addresses and nearly 10 billion transactions, AVAX appears to be regaining traction in the crypto market.

The renewed interest in Avalanche is also reflected in the derivatives market, where open interest (OI) for AVAX futures has risen to $498.46 million, up 3.59% over the last 24 hours. This increase suggests growing capital allocation as both long and short positions are being established. At the same time, whale activity has spiked, with larger investors driving higher order sizes in both spot and futures markets.

The token's recent price action within a descending wedge pattern has drawn attention from technical analysts. Bulls are closely watching for a potential breakout above $13.00, which would align with a key trendline formed by previous highs. A confirmation of this breakout could see AVAX targeting the 50-day exponential moving average at $14.79, and possibly even the 200-day EMA at $20.23.

Why the Standoff Happened

The surge in AVAX interest coincides with the unveiling of VanEck's new Avalanche ETF proposal, which includes staking rewards for AVAX investors. The ETF, which would trade under the ticker VAVX, plans to stake up to 70% of its AVAX holdings to generate yield. This move has drawn institutional interest, particularly from Coinbase Crypto Services, which is named as the initial staking provider. According to the proposal, staking rewards will be distributed to the fund after deducting a 4% service fee from Coinbase.

Whales and institutional players have reacted positively to the inclusion of staking in the ETF structure. The fund will not use leverage or derivatives and will track AVAX's price through the MarketVector Avalanche Benchmark Rate. This approach provides a more stable and income-generating investment vehicle for AVAX, potentially broadening its appeal to traditional investors.

How Markets Reacted

AVAX's price has benefited from the renewed interest, with the token trading above $12 as of late December. The market's bullish momentum is supported by on-chain metrics, including a 10% increase in 30-day transactions to 65.4 million and daily activity averaging around 2 million transactions. Additionally, the Avalanche network has seen the addition of approximately $210 million in total value locked (TVL) from Spark, a major player in the blockchain space.

Derivatives market data from platforms like CoinGlass and CryptoQuant further validate the growing optimism around AVAX. The Cumulative Volume Delta over the last 90 days indicates a dominance of buy-side activity in the derivatives market.

What Analysts Are Watching

Analysts are closely monitoring Avalanche's ability to break out of the descending wedge pattern, with a decisive close above $13.00 seen as a critical threshold. If the token manages to surpass this level, it could trigger a rally toward the 50-day EMA at $14.79 and beyond. On the other hand, a failure to maintain momentum above $11.18 could result in a steeper correction toward the S2 Pivot Point at $8.66.

Technical indicators such as the RSI and MACD also suggest a potential turnaround in AVAX's short-term trend. The RSI has moved above the oversold level of 30, indicating a decrease in selling pressure. Meanwhile, the MACD crossing above the signal line has generated fresh bullish momentum. However, these signals should be interpreted cautiously, as the token remains below all key moving averages and is still trading in a bearish technical environment.

The broader market context also plays a role in AVAX's outlook. While Bitcoin and Ethereum have seen stronger institutional interest, especially with the approval of Bitcoin ETFs, altcoins like AVAX are underperforming. This divergence is partly attributed to reduced risk appetite and regulatory uncertainty around altcoin inclusion in exchange-traded products. Nonetheless, Avalanche's unique value proposition, including its scalable smart contract platform and growing TVL, positions it as a potential breakout candidate in 2026.