Is AVAX Ready to Break Out? Descending Triangle Signals Big Move Ahead

Avalanche (AVAX) has long been a speculative favorite in the Layer-1 blockchain space, but recent technical and on-chain developments suggest the token may be on the cusp of a significant breakout. A confluence of chart patterns, institutional activity, and ecosystem upgrades has created a compelling case for both short- and long-term investors. However, as with any high-conviction trade, the risks remain non-trivial.

Technical Analysis: A Classic Setup for a Bullish Breakout

AVAX is currently consolidating within a descending triangle pattern on the daily chart, with key support around $33 and resistance near $41, according to a CCN analysis. This pattern, a common precursor to trend continuation, implies a potential bullish move if the price breaks above the resistance line. A breakout above $36–$37 would initiate Wave (i) in a five-wave impulsive structure, with subsequent targets at $42–$44 (Wave iii) and eventually $53–$55 (Wave v), aligning with 0.786 Fibonacci retracement levels, the CCN analysis notes.

Historical backtesting of AVAX triangle patterns from 2022 to 2025 reveals an average cumulative excess return of +2% at day 20, with a win rate of approximately 47%. However, these results are not statistically significant, suggesting that while the pattern is present, it may not be a standalone reliable indicator.

The 4-hour chart reinforces this narrative. According to a CoinSpeaker report, AVAX has already surpassed the 23.60% Fibonacci level at $38.82 and is testing the $40 psychological mark. On-chain data reveals strong support between $36.25 and $39.96, holding 22.28 million AVAX tokens, which CoinSpeaker noted could act as a buffer for further gains. If the price successfully breaks above $40, Fibonacci targets at $44.71 (0.5 retracement) and $51.09 (0.786 retracement) become critical resistance levels, CoinSpeaker's report suggests.

A longer-term perspective adds intrigue. AVAX is positioned near the apex of a 3-year triangle forming since early 2021. Multiple failed breakouts have occurred historically, but the structure remains intact. A confirmed breakout above $23 could trigger a rally toward $150 and $220, with momentum expected to carry beyond $220 if volume expands significantly, that CryptoNewsLand report argues.

On-Chain Sentiment: Growing Adoption and Institutional Confidence

On-chain metrics paint a bullish picture. In August 2025, Avalanche processed 1.5 million daily transactions, with the C-Chain recording its second-highest monthly volume at 35.8 million transactions, a CCN analysis showed. Daily active addresses surged 57% month-over-month to 46,397, reflecting robust user engagement. The Avalanche9000 upgrade further reduced the C-Chain minimum base fee by 96%, enhancing affordability and scalability, CoinSpeaker reported.

Key metrics like NVT (Network Value to Transactions) and SOPR (Spent Output Profit Ratio) also signal strength. Q1 2025 saw a 23.6% quarter-over-quarter increase in average daily transactions, reaching 3.8 million, per the CCN analysis. Active addresses grew by 146%, suggesting profitability for users and a healthy on-chain environment.

Whale activity in October 2025 has added another layer of confidence. According to a TS2 report, one whale purchased approximately 200,000 AVAX (~$6M), while another moved $12 million worth of AVAX to a Coinbase wallet, signaling accumulation during dips. Analysts interpret these moves as confidence in AVAX's potential rebound.

Institutional Tailwinds and Ecosystem Momentum

Avalanche's ecosystem has gained traction through strategic upgrades and partnerships. The $1 billion AVAX buyback plan by Avalanche Treasury Co. has reduced circulating supply and signaled institutional confidence, the TS2 report noted. Institutional collaborations, including SkyBridge's $300 million tokenized hedge fund and Mirae Asset's integration, highlight growing mainstream adoption, according to a Messari report.

The Octane upgrade slashed transaction fees by 42.7%, driving DEX volumes to a record $675.4 million in July 2025, the Messari report found. Total Value Locked (TVL) has also climbed to yearly highs, underscoring trust in the platform. Additionally, Avalanche's focus on real-world assets (RWAs)-surpassing $400 million in value-has expanded its utility beyond DeFi, the TS2 article adds.

Risks and Counterarguments

While the technical and on-chain indicators are encouraging, risks persist. A failure to hold above $34 or a breakdown below $29 would weaken the bullish case, potentially leading to a continuation of the downtrend, the CCN analysis warns. Broader market volatility and macroeconomic factors could also impact AVAX's trajectory.

Moreover, the long-term symmetrical triangle has seen multiple failed breakouts, and a false breakout above $23 could lead to a sharp correction, as CryptoNewsLand cautions. Investors must monitor volume and institutional follow-through to validate the pattern's integrity.

Conclusion: A High-Conviction Trade with Clear Targets

AVAX's technical setup and on-chain activity suggest a strong case for a breakout, particularly if the price clears $36–$37 in the short term and $40 in the near term. The confluence of descending and symmetrical triangle patterns, combined with institutional upgrades and whale accumulation, positions AVAX as a compelling speculative play. However, traders should remain cautious and use key support levels as risk management tools.

As the ecosystem continues to evolve with upgrades like Etna and the Avalanche 9000 campaign, AVAX's trajectory will depend on sustained DEX volume, RWA adoption, and effective execution of buyback initiatives. For now, the charts and data point to a potential inflection point.