Avalanche ($AVAX ) has recently broken out of a prolonged descending channel, fueling optimism among investors. As of the latest market data, AVAX is trading at $38.81, with a 24-hour trading volume of $1.78 billion and a market capitalization of $15.87 billion. Despite experiencing a 14.27% drop in the last 24 hours, the token has shown a strong 11.27% price increase over the past week, indicating sustained bullish sentiment.

Key Support Level at $38.57: A Crucial Foundation for Further Growth

At present, AVAX is testing a critical support level of $38.57, which had previously served as a significant resistance point. If this support level holds, AVAX could see a continued upward momentum, with the next major target being the resistance zone between $45.42 and $47.81. This area has historically rejected price advances in both July 2023 and February 2024, making it an essential level to break through. A successful move above this resistance could open the door for AVAX to target $65, a key psychological level that may attract substantial buying interest.

However, if the $38.57 support fails to hold, the price could drop to secondary support at $32.66, potentially leading to a short-term bearish trend.

Rising On-Chain Activity Signals Increased Network Adoption

On-chain metrics highlight a notable uptick in user activity within the Avalanche ecosystem. Active addresses have risen to 60.46K, marking a 28.56% increase over the past week, while newly created addresses have reached 11.98K during the same period. This surge in activity suggests growing participation within the Avalanche network, which could play a pivotal role in supporting AVAX’s upward price trajectory.

This increased user engagement aligns with AVAX’s recent positive price performance and broader ecosystem development, indicating healthy network utilization and reinforcing the bullish outlook for the token if favorable market conditions persist.

Resilient DeFi Ecosystem Underpins Avalanche's Long-Term Growth

Despite short-term price fluctuations, Avalanche’s decentralized finance (DeFi) ecosystem remains robust. The total value locked (TVL) in the Avalanche DeFi sector stands at $1.362 billion, though it has seen an 8.22% decline over the past 24 hours. Meanwhile, the stablecoin market capitalization within the ecosystem is valued at $1.961 billion, underscoring the stability of the platform's financial infrastructure.

Avalanche’s DeFi ecosystem also continues to generate significant revenue, with daily fees amounting to $92,555 and on-chain trading volume reaching $499.98 million in the past 24 hours. These factors indicate that Avalanche remains a leading player in the DeFi space, contributing to its potential for sustained growth.

Conclusion: Key Levels and Positive Outlook for AVAX

Avalanche shows promising growth potential following its breakout from a long-term bearish channel and an uptick in network activity. The critical support at $38.57 will be a decisive factor in determining whether AVAX can continue its ascent. If this level holds, the token may target the $45.42–$47.81 resistance zone and potentially reach $65.

With a strong DeFi ecosystem and increasing user adoption, Avalanche is well-positioned for further growth, provided that broader market conditions remain favorable.

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