Why Avalanche (AVAX) could plunge to $5: Price analysis

Record On-Chain Activity: The Long-Awaited Catalyst?

This is the kind of metric that doesn’t lie about the fundamental health of a blockchain. Avalanche recently recorded an all-time high of 1.71 million daily active addresses. This colossal figure demonstrates real and growing adoption, driven by the rise of DeFi (Decentralized Finance), tokenization, and real-world assets (RWA) on the network.

Unlike speculative spikes based on nothing at all, this increase in network activity is built on tangible developments and renewed institutional confidence. For investors, this is a strong bullish signal: the infrastructure is being used, and demand for block space is increasing. Currently, the price of AVAX is hovering around $12.66 (down approximately 6.9% over 24h), but this correction could merely be a retracement before the next bullish impulse.

On-chain data also reveals interesting behavior from whales. These large holders have aggressively accumulated when the price plunged toward $11.32, creating a solid buy wall. This price defense by institutional investors suggests they view current levels as an ideal accumulation zone before a potential rally.

Technical Analysis: Key Levels to Watch for AVAX

From a technical perspective, AVAX’s market structure offers a concerning outlook. The token is now trading below its bullish trendline on the HTF. If AVAX fails to reclaim $13.2, it risks a crash toward the next demand zone around $5.

The key to the next move lies in AVAX’s ability to break through its immediate resistance. Here are the crucial technical levels to monitor in the coming days:

• Major support: The $11 – $12 zone is vital. As long as the price holds above this level, the bullish structure remains intact. A break below $11 would invalidate the bullish scenario and could trigger a deeper drop.
• Key resistance: The $15.36 level acts as a glass ceiling. A confirmed breakout above this price, with volume, would unlock significant bullish potential.
• Price targets: If the $15.36 resistance gives way, the next technical target sits at $18.52. Beyond that, analysts envision an extended rally toward $24.18 if momentum holds.

However, caution remains warranted. Technical indicators like the RSI (Relative Strength Index) and the MACD show signs of short-term hesitation. The market is waiting for clear confirmation: either a powerful bounce on support, or a break of resistance.

Scenarios: Imminent Bull Run or Severe Correction?

The crypto market is currently in a phase of indecision, and AVAX is no exception. On the 9-hour chart, AVAX displays several bearish order blocks. The pressure is such that a return toward the southern order block at around $11 is almost certain.

Buyers need to show up aggressively, and most importantly, Bitcoin needs to reclaim $93,600.

With fundamental adoption booming and a technical configuration under high tension, Avalanche is one of the most interesting assets to watch this week. But the probability of an AVAX crash in the coming weeks increases with each passing day.

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