AVAX recently successfully broke through the descending wedge consolidation pattern, but the upward momentum has clearly weakened. Over the past few days, the price has retreated by about 9%, indicating that the bullish strength is beginning to fatigue. Meanwhile, the stochastic relative strength index (Stochastic RSI) has fallen back from the overbought zone, reflecting that the market is entering a cooling-off phase.
This development coincides with the Avalanche Foundation announcing the establishment of a Distributed Ledger Technology (DLT) Foundation in Abu Dhabi Global Market (ADGM). This move aims to enhance transparency and promote the adoption of Avalanche in the Middle East region. If regional adoption accelerates, it could strengthen the long-term demand base for AVAX.
Against the backdrop of increasing adoption and buyer-led acceleration, the market is watching whether AVAX has the opportunity to form a new upward trend after the correction. On-chain data shows that buying pressure has gradually increased: the Taker Cumulative Volume Delta indicator indicates that buyer strength has rebounded over the past two weeks. Once momentum restarts, the key focus for AVAX will be the resistance area above the wedge pattern, a level that has historically triggered multiple price reactions.
In terms of ecosystem activity, Avalanche’s contract interactions surged by 200,000 in the past 24 hours, with a total transaction volume reaching 6.9 million, indicating a rapid increase in network activity. However, the total value locked (TVL) has decreased by 5%, suggesting that funds are undergoing strategic reallocation to make room for potential large market movements.
From the daily chart perspective, AVAX still maintains an overall bullish trend. The wedge resistance zone will determine the next price direction, and the liquidity-rich area around $13 may become a key target in the subsequent stages.
In the medium to long term, as user adoption increases and ecosystem activity intensifies, AVAX is expected to show reversal signals near the wedge support. Although a correction has occurred in the short term due to weak buying pressure, the improvement in fundamentals could still lay the groundwork for the next rebound.
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