AVAX rebounds above $7 as institutional holdings reach 5 million tokens

AVAX responds to monthly support

Recent price charts indicate that AVAX has rebounded from the lower boundary of its long-term bullish structure after spending three months testing this support. The token moved back toward the $7.30 to $7.40 area following this extended consolidation. According to analyst Honeybear, the monthly Supertrend indicator places the lower bullish support near $6.29, highlighting how AVAX has repeatedly defended this region during the year’s downtrend.

However, the price remains well below broader trend resistance levels around $17 and $20.71, underlining that while the technical outlook is improving, a full bullish reversal would require a much stronger move. Reclaiming $10 on a monthly basis is seen as a step forward, while a move above $17 could confirm a larger structural shift for Avalanche.

Mini dictionary: Supertrend – A technical analysis indicator that highlights trend direction and dynamic support or resistance by factoring in price and volatility, often helping traders identify potential reversal points.

Holding the $6.20 to $6.30 region remains essential for base development, with a clean monthly close above $10 needed to strengthen the bullish outlook.

Retest of lower supports possible

Avalanche recently broke through a descending trendline that had restricted its upward movements since June, followed by a rapid rise to the upper $7 range. The price later consolidated near $7.30 to $7.40. Charts shared by analyst Cihan Altcoin suggest AVAX might revisit the former trendline support near $6.60 to $6.80 before making a further move higher. Such technical retests can provide structural confidence if new buyers emerge at these levels.

Should support hold, AVAX could retest $7.80 to $8.00, aligning with previous swing highs. However, a sustained drop below the reclaimed trendline may put the $6.20 to $6.40 region back in focus, weakening the current bullish narrative.

Bulls defend $7.05

In recent sessions, AVAX broke out of a multi-month base established between $6 and $7. The initial rally reached as high as $8.30, signaling a possible trend change. Analyst KhonshuArc identifies $7.05 as the key level bulls must protect for the uptrend to remain intact.

KhonshuArc emphasizes that maintaining support above $7.05 is critical for AVAX’s bullish setup, enabling another attempt at $8.30 and beyond.

Daily moving averages remain underneath price, lending further support. Surpassing $8.30 would bring $9.50 to $10 or even $12 into view. If AVAX slips below $7.05, it could open room for a pullback toward the $6.60 to $6.80 zone, or even lower supports if negative momentum builds.

Rising institutional activity and staking

Institutional exposure to Avalanche is growing. Asset managers Bitwise, VanEck, and Grayscale collectively hold over 5 million AVAX, with total institutional holdings around $38.27 million. Notably, around 3.49 million AVAX are staked, including the bulk of VanEck’s allocation. ETF-related holdings have climbed 34.2% over the past 13 weeks, reflecting increased institutional engagement and a rising share of tokens locked into the network for rewards.

Roughly 80% of VanEck’s AVAX is currently staked, suggesting that institutions are seeking more direct participation in Avalanche rather than adopting a purely passive investment strategy.

Higher staking rates mean a reduced liquid supply, which can amplify price movements as demand shifts. VanEck, Bitwise, and Grayscale are each prominent digital asset managers known for their diversified cryptocurrency investment products.

Mini dictionary: Staking – The process of locking up cryptocurrency to support network operations such as validating transactions, where participants earn rewards for their contribution; staked tokens are typically restricted from immediate sale.

Technical outlook and next steps

The immediate outlook for AVAX now largely depends on buyers’ ability to defend the $7.00 to $7.05 region. A convincing push above $7.80 would target the $8.30 resistance, and a breakout past this level could lead to further gains toward $9.50 and $10. Nevertheless, major resistance zones remain near $17 and $21 on the higher timeframe charts, seen as longer-term objectives rather than immediate possibilities.

If AVAX fails to hold $7.05, a deeper retracement could develop, with significant support reappearing between $6.20 and $6.30. Bulls need to maintain price above these clusters for the recent recovery structure to remain valid.

Trend reversal hopes grow

With a more constructive base structure and mounting institutional engagement, Avalanche enters a pivotal phase. Another successful defense of $7.05, coupled with a clear break above $8.30, would reinforce bullish sentiment and may shift attention to higher resistance levels. Conversely, renewed weakness below $7.05 could suggest the multi-month accumulation was insufficient for a full reversal.

• Bullish scenario: Sustaining above $7.05, reclaiming $8.30, and targeting $9.50 to $10 would reinforce the uptrend, with $17 to $21 as longer-term targets.
• Bearish scenario: Losing $7.05 could see AVAX drifting toward $6.60 to $6.80, with a decisive drop below $6.20 undermining the recovery structure.

Avalanche appears healthier than earlier in the year, but the next test will come from defending key support zones and building on recent momentum.