Picture Talking #AVAX

As of May 14, 2025, the price of Avalanche (AVAX) is fluctuating around the key support level of $20, with a complex game of technical and ecological fundamentals as follows:

1. Technical Aspect: Key Support and Bullish Signals

AVAX recently fell to the $20 support level, which historically triggered a 195% rebound, and is currently forming a descending wedge pattern, suggesting a potential reversal possibility. If it breaks through the upper edge of the wedge, the next resistance level is $30; however, if it loses the $20 support, it may test the low of $9 in 2023. Recent price volatility has increased, and the daily RSI shows a demand for oversold recovery, but trading volume has not significantly expanded, indicating a strong wait-and-see sentiment in the market.

2. Ecological Competition and Funding Flow Contradictions

Avalanche faces fierce competition from emerging Layer 1 projects like Berachain and Base, with its TVL dropping from a peak of $12 billion to $1.66 billion, and network revenue plummeting from a peak of $52 million to $430,000. Although the stablecoin scale has grown by 70% to $2.5 billion, funds are mostly locked in cross-chain bridges (like USDT) and have not been effectively invested in DeFi protocols, leading to insufficient actual demand for AVAX, creating a paradox of "increased liquidity but token devaluation."

3. Macroeconomic Policies and Institutional Dynamics

Concerns over the global economy sparked by Trump's tariff policies continue to suppress risk asset preferences, while the SEC's approval expectations for the AVAX spot ETF remain uncertain; if approved, it could attract institutional funds, but the current Bitcoin ETF still dominates. The positive news of Sumitomo Mitsui Banking adopting Avalanche as stablecoin infrastructure has yet to translate into price momentum, with the market focusing more on the actual application progress of the ecosystem.

4. Risks and Future Outlook

In the short term, it's crucial to watch the effectiveness of the $20 support; if it breaks, it may trigger panic selling. If it stabilizes and breaks through $30, it may open the door for a mid-term rebound. In the long run, the Pectra upgrade (enhancing staking efficiency) and RWA (real-world asset tokenization) narrative may become key catalysts, but the issues of Layer 2 competition and insufficient ecosystem activity need to be addressed. Currently, the long and short game intensifies, and it is advised to pay attention to the on-chain stablecoin usage rate and macroeconomic policy trends, responding cautiously to volatility risks.