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Why did the price of AVAX fall?

Avalanche (AVAX) dropped 1.74% over the last 24 hours to $30.35, underperforming the overall crypto market, which fell 0.66%. Three main reasons for this:

  1. Profit-taking after a strong 30-day rally (+25%)
  2. Technical resistance around the $31–$32 range
  3. Shift in market focus toward Bitcoin, which now holds 58% market dominance

Deep Dive

1. Profit-Taking Pressure (Negative Impact)

Overview:
AVAX surged 70% over the past 90 days and 25% in the last 30 days, outperforming Bitcoin’s yearly gain of about 16%. The recent pullback is typical after such a strong rally, as traders often take profits.

What this means:
Many traders likely sold some AVAX after it couldn’t break above the $31.50 resistance level. Trading volume over the past 24 hours was $742 million, slightly down by 1.26% from the previous day. The 7-day Relative Strength Index (RSI) is at 44.56, suggesting there’s still room for prices to drop before AVAX becomes oversold.

Key metric: Keep an eye on the $29.60 support level (30-day Exponential Moving Average). If AVAX falls below this, losses could deepen.

2. Technical Resistance at Key Levels (Mixed Impact)

Overview:
AVAX is facing strong resistance at:

What this means:
The MACD histogram, a tool that measures momentum, is negative (-0.34035), indicating bearish pressure. The price is also below important moving averages, which can act as resistance. However, the 30-day EMA at $29.68 offers some support to the price.

Key level: If AVAX closes above $31.40, it could regain upward momentum and aim for $33.12 (23.6% Fibonacci retracement).

3. Bitcoin Dominance Surge (Negative Impact)

Overview:
Bitcoin’s share of the total crypto market increased to 58.31%, up 0.1% in the last 24 hours, as Bitcoin hit new all-time highs. This shift is pulling investment away from altcoins like AVAX.

What this means:
The crypto Fear & Greed Index stands at 59 out of 100, indicating a neutral but cautious market sentiment. Traders are favoring Bitcoin for its perceived stability. AVAX’s 24-hour price correlation with Bitcoin dropped to 0.76, showing it’s somewhat moving independently.

Key watch: Bitcoin’s ability to maintain the $125,000 level is crucial. If it fails, altcoins like AVAX could face a liquidity squeeze.

Conclusion

AVAX’s recent price drop is a normal correction after strong gains, combined with technical resistance and a market shift toward Bitcoin. Despite this, Avalanche’s network fundamentals remain solid, with smart contract activity tripling year-over-year and $2.2 billion in decentralized exchange volume over the past three days. However, short-term market sentiment currently favors Bitcoin.

Key watch: Will AVAX hold the $29.60 support level amid Bitcoin’s price swings? Also, watch today’s $3.3 billion Bitcoin options expiry for clues on the broader market direction.


What could affect the price of AVAX?

Avalanche strikes a balance between strong technology and growing business use – keep an eye on subnet adoption and regulatory developments.

  1. Subnet Economics Upgrade – Lower fees and flexible staking options could encourage more developers to build on Avalanche (Positive)
  2. Real-World Asset (RWA) Tokenization Growth – A $250 million institutional fund is focusing on real-world assets on Avalanche (Mixed)
  3. ETF Approval Delays – The SEC postponed its decision on the Grayscale spot ETF until July 2025 (Negative)

Deep Dive

1. Subnet Flexibility & Fee Reductions (Positive Impact)

Overview:
Avalanche’s upcoming Octane Upgrade, expected in July 2025, will reduce transaction fees on its C-Chain by 96%, bringing costs down to about $0.01 per transfer. It also introduces a pay-as-you-go system for validator staking through ACP-77. So far this year, over 44 million smart contracts have been deployed, showing strong developer interest. These improvements lower the cost and complexity for businesses to create their own subnets on Avalanche.

What this means:
With cheaper transactions and more flexible subnet costs, Avalanche becomes more competitive compared to Ethereum Layer 2 solutions for businesses. After similar upgrades, daily active users on the network jumped by 57%, indicating that these changes could increase demand for AVAX, Avalanche’s native token, as the currency for settling transactions.

2. Real-World Asset Tokenization Race (Mixed Impact)

Overview:
Avalanche has partnered with Janus Henderson to launch a $250 million fund focused on tokenizing real-world assets, including over 370,000 U.S. property records. However, competitors like Solana and Polygon currently handle more than twice the monthly volume of tokenized real-world assets (The Defiant).

What this means:
While Avalanche benefits from partnerships with big names like FIFA and Alibaba Cloud, faster growth in decentralized finance (DeFi) on rival networks creates challenges for AVAX’s valuation. To keep up, Avalanche needs to consistently exceed $2 billion in quarterly decentralized exchange (DEX) trading volume, up from the current $1.6 billion, to justify its $12.8 billion market value compared to competitors.

3. Regulatory Challenges for ETFs (Negative Impact)

Overview:
The U.S. Securities and Exchange Commission (SEC) delayed its decision on the Grayscale Avalanche ETF until July 15, 2025. This follows a similar pattern with Ethereum ETFs, which took about 18 months to get approved. Additionally, Thailand banned AVAX trading on five exchanges in June, cutting about $28 million in daily liquidity.

What this means:
These delays slow down institutional investment compared to Bitcoin and Ethereum, which already have ETF access. However, Avalanche’s work in tokenizing U.S. real estate could give it an advantage if regulators approve real-world asset products before allowing spot ETFs.

Conclusion

The future price of AVAX depends on how well Avalanche can turn its technical improvements into real-world subnet adoption while managing regulatory uncertainties. The price range between $24.60 and $33.10 will be critical in determining if business partnerships can offset the volatility common in altcoin markets.

Can Avalanche attract the next 100,000 real-world asset users before ETF delays reduce its valuation premium?


What are people saying about AVAX?

Avalanche (AVAX) is currently experiencing mixed signals, swinging between excitement over potential growth and cautious pauses. Here’s what’s happening:

  1. Big institutional investments – Plans for a $1 billion treasury are driving optimism
  2. Price struggles at $25 – Both buyers and sellers are testing this key level
  3. Network activity spikes – Record transaction numbers meet cautious large investors

In-Depth Look

1. Institutional Interest Sparks Optimism

According to @Defi_Edward, Avalanche Foundation’s plan to build a $1 billion treasury is encouraging big investors to buy AVAX. A Nasdaq-listed company aims to accumulate $550 million worth of AVAX tokens.
See original post
What this means: This is a positive sign for AVAX because when large institutions buy and hold tokens, it can reduce the number of coins available on the market and show confidence in Avalanche’s technology, especially its use in turning real-world assets into digital tokens.

2. Price Action Shows Mixed Signals

@ManLyNFT points out that in August, Avalanche’s C-Chain handled 35.8 million transactions, and there’s growing interest in an ETF (exchange-traded fund) filing by Bitwise. However, the Relative Strength Index (RSI), a tool that measures if an asset is overbought or oversold, is nearing 67, which suggests AVAX might be overbought soon.
See original post
What this means: This is a mixed signal. High network use and ETF interest support price gains, but the overbought RSI warns of possible short-term price drops.

3. Bearish Pressure Below $24.60

A community post on CoinMarketCap highlights that AVAX is struggling to stay above $24.60. With 76% of traders holding short positions on Binance, there’s a risk that if AVAX falls below $24, it could trigger a sharper decline to around $23.60.
See original post
What this means: This is a warning sign. If AVAX can’t hold key support levels, it may lead to more selling as traders try to limit losses, pushing the price down further.

Summary

The outlook for Avalanche (AVAX) is currently mixed. On one hand, big institutional buying and record transaction volumes (2.22 million daily transactions in August) point to strong long-term potential. On the other hand, price resistance around $25 to $27 and cautious traders create uncertainty. Keep an eye on upcoming decisions about the Grayscale ETF and whether AVAX can stay above its 50-day simple moving average (SMA) at $28.40. Breaking above $27 could confirm a bullish trend, while falling below $22 might signal further declines.


What is the latest news about AVAX?

Avalanche is growing its ecosystem while staying cautious about the market. Here are the latest updates:

  1. Smart Contracts Triple (October 4, 2025) – Activity on the AVAX network jumps as decentralized finance (DeFi) trading hits $2.2 billion in just three days.
  2. $675 Million SPAC Merger Announced (October 4, 2025) – Avalanche Treasury partners to bring in more institutional investors.
  3. Bitwise Files AVAX ETF (September 17, 2025) – A new ETF proposal shows increasing regulatory acceptance of AVAX.

Deep Dive

1. Smart Contracts Triple (October 4, 2025)

Overview:
Avalanche’s smart contracts reached 44 million in 2025, tripling compared to last year. This growth happened alongside $2.2 billion in trading volume on decentralized exchanges (DEXs) over three days, driven by DeFi projects and games like MapleStory Universe.

What this means:
This is a positive sign for AVAX because more smart contracts mean more developers trust and use the network for real applications. However, AVAX’s price dropped by 3.84% after the news, possibly because traders expected this growth already. (CryptoTimes)

2. $675 Million SPAC Merger Announced (October 4, 2025)

Overview:
Avalanche Treasury announced a $675 million merger with a Special Purpose Acquisition Company (SPAC). This move is part of a plan to attract more institutional money. It follows the launch of AVAX One, a company listed on Nasdaq that focuses on holding AVAX tokens.

What this means:
In the short term, this news is neutral for AVAX. SPAC mergers can bring more liquidity and attention but might reduce the value for smaller investors. Over time, it could help stabilize Avalanche’s funds and attract big corporate investors. (Millionero Magazine)

3. Bitwise Files AVAX ETF (September 17, 2025)

Overview:
Bitwise Asset Management has filed to create an Avalanche ETF, joining other firms like VanEck and Grayscale in seeking regulated ways to invest in AVAX. The U.S. Securities and Exchange Commission (SEC) is reviewing the proposal, with a high chance of approval based on similar ETFs.

What this means:
This is good news for AVAX because ETF approval would likely increase demand from institutional investors. However, competition from ETFs for other coins like Solana and XRP might divide the investment money. (X (Twitter))

Conclusion

Avalanche is expanding both developer activity and institutional interest, but its price hasn’t caught up yet. The big questions are whether ETF approvals and SPAC mergers will create a supply shortage that pushes prices higher, or if broader economic challenges will keep AVAX trading within a range.


What is expected in the development of AVAX?

Avalanche’s roadmap is centered on growing institutional use, improving scalability, and expanding its ecosystem.

  1. Real-World Asset Expansion (Q4 2025) – Partnering with Visa for stablecoin payments and $250 million in tokenized real-world assets through Grove.
  2. Subnet Scalability Upgrades (Q4 2025) – Introducing dynamic fees, optimizing validators, and enabling better subnet interoperability.
  3. Corporate Treasury Initiatives (Late 2025) – Launching a $1 billion program to bring institutions on board as AVAX holders.
  4. Interoperability Enhancements (2026) – Building cross-chain bridges and decentralized identity systems.

Deep Dive

1. Real-World Asset Expansion (Q4 2025)

Overview: Avalanche is strengthening its presence with institutions by integrating Visa for stablecoin transactions and working with Grove to tokenize $250 million worth of assets like treasury bills. This supports their "Evergreen Subnet" plan, which focuses on compliant asset issuance.
What this means: This is positive for AVAX because more institutional use can increase demand for staking and subnet services. However, regulatory challenges around tokenizing assets across borders could pose risks.

2. Subnet Scalability Upgrades (Q4 2025)

Overview: The Avalanche9000 upgrade will bring dynamic fee structures and lower validator costs by replacing the fixed 2,000 AVAX staking requirement with a pay-as-you-go model (Blockworks). Subnets like FIFA’s NFT platform and MapleStory’s gaming chain show how Avalanche can scale.
What this means: This is a long-term positive, as cheaper subnet deployment can attract more businesses. Still, Avalanche faces competition from Ethereum Layer 2 solutions and Solana’s fast network.

3. Corporate Treasury Initiatives (Late 2025)

Overview: The Avalanche Foundation plans to create two U.S.-based treasury firms that will buy and stake $1 billion worth of AVAX at discounted prices, similar to how some companies have accumulated Bitcoin (Cointribune).
What this means: This could reduce the circulating supply of AVAX and support the price, but its success depends on how many investors participate and overall market conditions.

4. Interoperability Enhancements (2026)

Overview: Avalanche plans to improve cross-chain communication with upgrades to its Interchain Messaging (ICM) protocol, allowing smooth asset transfers between subnets and other blockchains like Bitcoin.
What this means: This will help unify the ecosystem, but its impact depends on developer adoption. Other projects like Polkadot and Cosmos offer similar cross-chain solutions.

Conclusion

Avalanche’s roadmap focuses on building strong institutional partnerships (like Visa and VanEck), enhancing scalable infrastructure through subnets, and managing supply with treasury programs. While upcoming technical improvements and real-world asset adoption are promising, Avalanche’s future success will rely on attracting developers and navigating regulatory challenges.

Will Avalanche’s enterprise-focused approach help it lead the way in real-world blockchain applications?


What updates are there in the AVAX code base?

Avalanche made significant improvements to its technology in July 2025, focusing on lowering fees, improving scalability, and making the platform more attractive for businesses.

  1. Octane Upgrade (July 2025) – Introduced dynamic fees, prepared for parallel processing, and revamped how validators earn rewards.
  2. eERC Standard Launch (July 2025) – Rolled out encrypted tokens that protect privacy while allowing audits.
  3. Subnet Tooling Surge (July 2025) – Developer activity increased by 35%, improving cross-chain communication and performance.

Deep Dive

1. Octane Upgrade (July 2025)

Overview: Avalanche reduced transaction fees on its C-Chain by 98%, dropping from about $0.25 to just $0.01 per transfer. It also introduced dynamic fee adjustments to prevent network spam during busy times.

Key changes included:

Why it matters: Lower and more predictable fees make small transactions practical, which is great for gaming and real-world asset use cases. Validators now earn rewards based on cross-chain message traffic, encouraging subnet growth and network expansion. (Source)

2. eERC Standard Launch (July 2025)

Overview: Avalanche introduced encrypted ERC-20 tokens that let businesses keep token balances private but still allow authorized parties, like regulators, to audit when needed.

Developers can now:

Why it matters: This feature balances privacy with transparency, appealing to regulated businesses that need confidentiality without losing compliance. While it adds some complexity, it could attract more institutional users. (Source)

3. Subnet Tooling Surge (July 2025)

Overview: Developer contributions on GitHub increased by 35% compared to the previous month, focusing on:

Why it matters: These improvements make it easier for developers to build and operate subnets, which are specialized blockchains within Avalanche. This supports Avalanche’s goal of enterprise adoption, with organizations like FIFA and VanEck already running their own subnets. (Source)

Conclusion

July 2025 was a milestone for Avalanche as it enhanced its platform to be more business-friendly through lower fees, privacy features, and better subnet scalability. With daily transactions staying above 1.2 million after the upgrades, developer engagement remains strong. The big question now is whether the eERC standard will become the preferred choice for compliant real-world assets (RWAs).