Why did the price of AVAX fall?

Avalanche (AVAX) dropped 2.09% to $11.96 in the last 24 hours, slightly underperforming the overall crypto market, which fell 2.45%. Here’s what’s driving this movement:

1. Technical Weakness – The price fell below important support levels, and indicators show weak buying momentum.
2. Increased Token Supply – About 1.6 million AVAX tokens are unlocked daily, adding selling pressure amid low demand.
3. Mixed Institutional News – Galaxy’s new hedge fund strategy has created some short-term uncertainty.

1. Technical Weakness (Negative Impact)

What’s happening: AVAX’s price dropped below its 7-day and 30-day moving averages (around $13.35), and the Relative Strength Index (RSI) is at 24.28, signaling the token is oversold—the lowest since December 2025. The MACD indicator also points to bearish momentum.

What this means: Traders see the price falling below $12.30 (a key retracement level) as a warning sign, leading many to reduce their holdings. Without signs of a price rebound, AVAX could fall further if it breaks below $11.88 support.

Key level to watch: If AVAX closes above $12.53, it might signal a recovery. But if it drops below $11.88, panic selling could follow.

2. Token Unlock Overhang (Negative Impact)

What’s happening: Every day, 1.6 million AVAX tokens (worth about $19.1 million) become available due to scheduled unlocks. At the same time, fewer tokens are being staked—only 46.5% of the total supply compared to over 60% in 2025.

What this means: More tokens entering the market increase selling pressure, especially since buying activity has dropped 19% compared to last year. Additionally, fewer active users on the network (down 8% month-over-month) aren’t helping to balance out this increased supply.

3. Institutional Sentiment Shift (Mixed Impact)

What’s happening: Galaxy recently launched a $100 million hedge fund that includes short positions on cryptocurrencies. Their Avalanche-based CLO tokenization project hasn’t yet boosted positive momentum.

What this means: While institutional interest in Avalanche continues to grow over the long term (for example, the NYSE-listed AVAX One validator node), traders are cautious in the short term due to Galaxy’s mixed long and short strategies.

Conclusion

AVAX’s recent decline is driven by technical challenges, increased token supply, and cautious institutional behavior. Although its growing subnet adoption and partnerships like the $75 million Galaxy CLO offer solid long-term support, a near-term recovery depends on AVAX reclaiming the $12.50 level and easing selling pressure from token unlocks.

Key watch: Can AVAX hold the $11.88 support level as derivatives open interest rises by 7.42% in 24 hours? If it fails, the price could retest its 2026 low near $9.50.

What could affect the price of AVAX?

The price outlook for Avalanche (AVAX) is currently a balance between positive institutional interest and ongoing market challenges.

1. Institutional Adoption – Recent deals involving tokenized loans and filings for AVAX ETFs could bring new investment, increasing demand.
2. Network Development – Upgrades like Granite improve the network’s speed and performance, but daily token releases and competition keep selling pressure high.
3. Regulatory Engagement – Active work with regulators may reduce uncertainty over time, though short-term risks remain.

Deep Dive

1. Institutional Capital & ETF Momentum (Positive Influence)

Overview: In recent weeks, there have been clear moves by big financial players. Galaxy Digital completed a $75 million tokenized loan deal on Avalanche. Asset managers like VanEck and Grayscale have filed to launch spot AVAX ETFs, which include features like staking to earn rewards (VanEck, Grayscale). While these filings still need approval, they show strong institutional interest.
What this means: If these products launch successfully, they could create a new, regulated way for investors to buy AVAX. This would link network use and staking rewards directly to investor returns, potentially lowering the number of tokens available for sale and supporting the price.

2. Ecosystem Growth vs. Supply Pressure (Mixed Impact)

Overview: Avalanche is growing its ecosystem, including a $1 million Build Games competition and the Granite upgrade, which speeds up transaction finality. However, there is a downside: about 1.6 million AVAX tokens are unlocked daily, adding roughly $19.7 million worth of tokens to the market every day (analysis). This steady increase in supply creates ongoing selling pressure.
What this means: While improvements and incentives aim to increase demand, the constant release of new tokens makes it harder for prices to rise. For AVAX to sustain a rally, demand needs to consistently outpace this growing supply.

3. Regulatory & Policy Advocacy (Positive Influence)

Overview: The Avalanche Policy Coalition is actively working with U.S. regulators. Their proposal suggests integrating crypto into existing market rules through a transitional certification process, favoring adaptable regulation over entirely new frameworks.
What this means: Clear and practical regulations reduce uncertainty for institutional investors. Avalanche’s proactive approach could make AVAX a favored asset in regulated financial products, supporting long-term growth.

Conclusion

In the short term, AVAX faces challenges from token unlocks and market sentiment. However, its medium-term outlook depends heavily on institutional adoption and clearer regulations. For investors, patience may be needed as these bigger factors develop.
Will regulatory progress and ETF approvals provide the momentum needed to push AVAX past key resistance levels? Only time will tell.

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What are people saying about AVAX?

The Avalanche (AVAX) community is feeling very positive, even though the price is near its lowest point this year. Here’s what’s happening:

1. Big institutional moves, like VanEck’s $100 million fund and FIFA’s switch to Avalanche, are seen as strong reasons to be optimistic.
2. Traders are focused on the $14.65 price level—if AVAX breaks above this, it could signal a trend change.
3. The community believes AVAX is "heavily undervalued" and is excited about big things coming in 2026.
4. New initiatives, such as a $1 million competition for developers, are designed to boost growth and innovation on the network.

Deep Dive

1. Institutional Momentum Builds Bullish

@bpaynews predicts AVAX could reach $15.50 to $16.50 by early February, based on technical signals suggesting a possible breakout.
View original post

What this means: This suggests the recent price drop is just a pause before AVAX moves higher, giving traders a clear target and reason to watch closely.

2. Critical Resistance at $14.65 Defines Next Move

@TXGTRADES points out that AVAX is testing a key resistance level at $14.65, while holding support near $12. A clean break above $14.65 would be the first strong bullish sign in months.
View original post

What this means: If AVAX breaks above $14.65, it could trigger more buying and a positive price trend. If it fails, the current downward trend may continue.

3. Community Declares 2026 as "Our Year"

@avaxjesus expresses strong confidence in AVAX and the Avalanche ecosystem, calling 2026 “our year.”
View original post

What this means: This shows the community’s strong belief in AVAX’s future, which can help keep morale high and support the coin during tough times.

4. Network Launches $1M Builder Competition

Coinspeaker reports Avalanche has started a six-week global competition with $1 million in prizes to encourage developers to build new projects on the platform.
View original article

What this means: This investment aims to grow the Avalanche ecosystem by attracting developers and creating new applications, which is important for the network’s long-term success.

Conclusion

The overall outlook for AVAX is bullish. While the price has been weak, strong institutional interest and a passionate community are driving optimism. Traders are watching the $14.65 resistance level closely—if AVAX can break and hold above this price, it could spark a positive shift that matches the growing confidence around the coin.

What is the latest news about AVAX?

Avalanche is making strides with growing institutional support, developer engagement, and regulatory discussions. Here are the key updates:

1. AVAX One Node Launch (January 21, 2026) – AVAX One, a NASDAQ-listed company, launched an institutional-grade validator node to strengthen network security and encourage more staking.
2. $1 Million Game Developer Competition (January 20, 2026) – Avalanche kicked off a global contest offering $1 million in prizes to developers building on its platform, along with access to an accelerator program.
3. Regulatory Framework Proposal (January 20, 2026) – A coalition recommended that existing SEC and CFTC rules be adapted for crypto spot markets to provide clearer guidelines without creating new regulations.

In-Depth Look

1. AVAX One Node Launch (January 21, 2026)

What happened:
AVAX One, a company listed on NASDAQ, launched a public validator node on the Avalanche blockchain. This node uses high-quality cloud infrastructure designed for reliable and continuous operation. The goal is to improve network security and encourage more people to stake their AVAX tokens by delegating to this node.

Why it matters:
This development is positive for Avalanche because it brings in institutional-level participation, which helps secure the network and reduces the number of tokens available for trading by locking them in staking. It also shows that businesses trust Avalanche’s technology, which could attract more large-scale validators in the future.

(Binance News)

2. $1 Million Game Developer Competition (January 20, 2026)

What happened:
Avalanche launched "Build Games," a six-week global competition offering $1 million in milestone-based prizes to developers creating games on its platform. Winners also get access to the Codebase accelerator program, which includes $50,000 grants and opportunities to showcase their projects. This comes as Avalanche sees record activity, with 1.71 million daily active addresses.

Why it matters:
This is a big boost for Avalanche because it encourages innovation in decentralized applications (dApps), especially in gaming—a fast-growing area. Supporting developers with prizes and resources can increase user activity and transactions on the network, helping Avalanche prove its ability to scale effectively.

(Coinspeaker)

3. Regulatory Framework Proposal (January 20, 2026)

What happened:
The Avalanche Policy Coalition recommended that the SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission) regulate crypto spot markets by adapting existing rules instead of creating new ones. Their plan includes temporary relief for regulated intermediaries and formal rulemaking that takes blockchain’s unique features into account.

Why it matters:
This is a neutral development for Avalanche. Clearer regulations could make it easier for institutions to participate in the crypto market, but the final impact depends on how regulators respond. If successful, this approach could help Avalanche become a preferred platform for tokenizing real-world assets.

(Yahoo Finance)

Conclusion

Avalanche is focusing on building strong institutional infrastructure, motivating developers, and engaging with regulators to support long-term growth. These efforts could drive the next wave of adoption for AVAX in 2026.

What is expected in the development of AVAX?

Avalanche’s 2026 roadmap centers on attracting institutional users, improving ecosystem tools, and upgrading its technology.

1. AVAX HUB v2 (January 2026) – Better ways to find Avalanche projects and earn rewards.
2. Evergreen Subnets (Q1 2026) – Custom blockchains designed for regulated institutions like banks.
3. Granite Upgrade (Q1 2026) – Faster cross-chain communication and quicker transaction times.

Deep Dive

1. AVAX HUB v2 (January 2026)

Overview:
The AVAX HUB v2 update will make it easier to discover projects, governance proposals, and educational content within the Avalanche network. It will also introduce a rewards system that gives tokens to creators and developers who help grow the ecosystem.

What this means:
This is positive for AVAX because making content more visible can attract more developers and users, which strengthens the network. However, its success depends on keeping the community actively involved.

2. Evergreen Subnets (Q1 2026)

Overview:
Avalanche is expanding its Evergreen Subnets, which are permissioned blockchains tailored for institutions such as banks and asset managers. These subnets include features to meet regulatory requirements, like identity verification (KYC/AML) and private transaction options.

What this means:
This is somewhat positive because getting institutions on board could increase long-term demand for AVAX, which is used to pay fees and stake on these subnets. However, progress may be slower compared to projects aimed at everyday users.

3. Granite Upgrade (Q1 2026)

Overview:
After testing on the Fuji testnet in October 2025, the Granite Upgrade will bring two key features to the main Avalanche network: ACP-181 for cross-chain messaging and ACP-226 for dynamic block times. This upgrade aims to achieve transaction finality in under a second, which is important for business uses like payments.

What this means:
This is a positive development because faster and cheaper transactions can help Avalanche become a leader in tokenizing real-world assets. However, there are risks since past upgrades have faced delays.

Conclusion

Avalanche’s 2026 plans focus on building infrastructure for institutions while also enhancing tools for developers and everyday users. The combination of subnets for regulated finance and the AVAX HUB v2 for community engagement aims to support growth.

Can Avalanche’s strategy of serving both institutions and the community keep it competitive as more Layer 1 blockchains emerge?

What updates are there in the AVAX code base?

Avalanche made major improvements to its technology in 2025, focusing on making the network faster, cheaper, and more suitable for businesses.

1. Granite Upgrade (November 2025) – Added flexible block timing and biometric security for decentralized apps (dApps).
2. Octane Upgrade (July 2025) – Cut transaction fees by 96% and changed how validators earn rewards.
3. eERC Standard (July 2025) – Introduced encrypted ERC-20 tokens that allow selective auditing for privacy and compliance.

Deep Dive

1. Granite Upgrade (November 2025)

Overview: This major update improved Avalanche’s speed, security, and ability to work with other blockchains.

Key changes:

• Dynamic block times: Validators can now adjust how often blocks are created (between 5 to 10 minutes), enabling faster transaction confirmations—potentially under a second.
• Biometric authentication: Support for cryptographic methods used in FaceID and TouchID allows users to log into dApps without passwords.
• Stable validator sets: Reduced errors in cross-chain communication by 43% and lowered transaction costs when interacting with subnetworks.

Why it matters: These improvements make Avalanche more attractive to everyday users and businesses by speeding up transactions and enhancing security. Stable validators also reduce risks for companies using the network. (Source)

2. Octane Upgrade (July 2025)

Overview: This update revamped Avalanche’s main smart contract chain (C-Chain), focusing on fees and validator incentives.

Key features:

• Pay-as-you-go staking: Instead of requiring a fixed 2,000 AVAX to become a validator, fees now adjust dynamically, cutting costs to deploy subnetworks by 83%.
• Dynamic fee algorithms: Base transaction fees dropped from 25 nanoAVAX (nAVAX) to 0.1 nAVAX, making average transfers cost about one cent.
• Asynchronous execution groundwork: Prepared the network to process multiple transactions in parallel, improving speed (expected live in Q3 2025).

Why it matters: Lower fees make Avalanche more accessible to users and developers. However, the reduced staking requirements might temporarily affect network security. Overall, this is a positive step toward scalability. (Source)

3. eERC Standard (July 2025)

Overview: AvaCloud introduced a new token standard that encrypts ERC-20 tokens, balancing privacy with regulatory needs.

Key features:

• Selective auditability: Allows institutions to share token information with regulators without revealing user identities.
• Application-layer encryption: Uses zero-knowledge proofs to enable private decentralized finance (DeFi) transactions.

Why it matters: This positions Avalanche as a strong platform for regulated real-world assets (RWAs), competing with Ethereum’s offerings for institutional users.

Conclusion

Avalanche’s 2025 upgrades focused on making the network more scalable (Octane), secure (Granite), and business-friendly (eERC). Lower fees and biometric logins improve user experience, but the long-term success depends on how widely subnetworks are adopted. What will spark the next wave of Avalanche-based Layer 1 blockchains?