Avalanche (AVAX): Navigating Challenges and Opportunities

Written by Tony Kim
July 12, 2025, 03:16

Avalanche (AVAX) finds itself in a little bit of a rollercoaster phase because the SEC hits pause on Grayscale’s ETF decision and GMX suffers a hefty $42M hack. Yet, amidst these challenges, promising partnerships and grants hint at a positive longer-term outlook.

Executive Summary

Avalanche (AVAX) is steering through a difficult week, juggling regulatory barriers and security threats, but shimmering with hope through its exciting partnerships and tech upgrades. The SEC’s delay in making a call on Grayscale’s AVAX ETF and the $42M hack on GMX are casting a shadow on market vibes. However, the announcement of the hefty $40M Retro9000 grant program and Blockticity’s embrace of Avalanche point to a vivid horizon. With the worth currently at $20.90 and a mixed bag of technical signals, AVAX’s short-term path is a bit foggy, but the expansion possibilities are plenty.

Recent Market Developments

1. SEC Holds Off on Grayscale ETF Decision

   On July 10, 2025, the SEC prolonged its review of Grayscale’s Avalanche ETF proposal to July 15, 2025. This delay stirred up some market jitters, knocking AVAX down 6% as investors felt the familiar sting of regulatory uncertainty. These hold-ups are likely to spook investors, taking some wind out of AVAX’s sails within the short run.

2. GMX Hack Unveils Security Flaws

   Also on July 10, 2025, a $42M breach on GMX’s GLP liquidity pool on Arbitrum led to a pause in trading and minting activities across Arbitrum and Avalanche networks. This incident dropped at light some glaring vulnerabilities in DeFi systems, leaving users uneasy about Avalanche’s security framework and feeding a bearish market sentiment.

3. Blockticity Partnership Spurs Adoption

   On July 9, 2025, Blockticity launched an Avalanche-powered blockchain for global trade certificates, highlighting Avalanche’s prowess in enterprise blockchain solutions. With plans to process $1.2B in goods annually, this partnership showcases Avalanche’s knack for drawing high-value, real-world applications, strengthening its long-term viability.

4. $40M Retro9000 Grant Program Launched

   On July 9, 2025, the Avalanche Foundation rolled out a $40M Retro9000 grant program geared toward bolstering Layer-1 projects and core infrastructure. Already backing 19 projects, this initiative is a testament to ongoing investment in Avalanche’s ecosystem, giving a nod to its future growth potential.

5. Bearish Sentiment Amidst Price Swings

   On July 8, 2025, during the last month, AVAX saw notable price swings (-14.53%) and bearish sentiment, with green days making up only 43% of the time. Despite this, some analysts are optimistic, forecasting a 94.11% hike to $34.03 by mid-July, driven by technical indicators suggesting a possible comeback.

6. Avalanche Subnets Show Potential

   On July 6, 2025, Avalanche’s subnet technology, which enables custom blockchain creation, continues to make waves. Recent expansion efforts within the Middle East highlight its potential as a flexible platform, though its immediate impact on AVAX’s price has been relatively muted.

   
   
   

Technical Analysis

Current Price and Volume
– Price: $20.90 (up 0.43% prior to now day)
– 24h Range: $21.53 – $20.32
– 24h Volume: $65,864,848

Moving Averages
– Short-Term Strength: The SMA7 ($19.49) and EMA12 ($19.29) indicate a bullish tilt.
– Medium-Term Stability: The SMA20 ($18.48) and EMA26 ($19.03) hint at a gradual recovery.
– Long-Term Weakness: The SMA_200 ($24.16) points to lingering bearish pressures.

Momentum Indicators
– RSI(14): 62.64 (nearing overbought territory, suggesting a possible short-term pullback).
– MACD: A positive crossover with a histogram of 0.4597 supports ongoing bullish momentum.
– Stochastic Oscillator: %K (86.27) and %D (88.47) indicate overbought conditions.

Key Levels
– Resistance: $21.53 (R1), $24.35 (R2).
– Support: $16.26 (S1), $15.61 (S2).
– Pivot Point: $20.92 (current price is hovering near this level).

Volatility
– ATR(14): $1.11 (moderate volatility).
– Bollinger Bands: AVAX is trading near the upper band ($20.66), indicating potential overextension.

Trading Strategy and Signals

1. Short-Term Strategy

   Given the present bullish momentum and overbought signals, traders might consider selling near $21.53 (R1) while setting stop-loss orders below $20.32.

2. Medium-Term Strategy

   Keep an eye fixed on price actions across the $20.92 pivot. A confirmed breakout above $21.53 could signal a move toward $24.35 (R2). On the flip side, a drop below $20.32 might test the waters right down to $16.26 (S1).

3. Long-Term Strategy

   Accumulating AVAX near the $20 mark or lower is likely to be worthwhile for long-haul investors, especially if Avalanche’s ecosystem keeps growing.

Price Predictions and Outlook

• Short-Term: Expect some volatility while the market chews over recent news, with prices potentially bouncing between $20 and $24.
• Mid-Term: Positive developments, resembling the Retro9000 program and the Blockticity partnership, could propel AVAX over $30 by the top of 2025.
• Long-Term: If Avalanche keeps up its pace of adoption and ecosystem expansion, it could aim for its 52-week high of $53.98 by mid-2026.

Risk Analysis

1. Regulatory Risks

   The SEC’s cautious approach to crypto ETFs adds a layer of uncertainty, potentially keeping AVAX’s price in check within the near term.

2. Security Concerns

   The GMX hack underscores vulnerabilities inside DeFi systems, which could affect user confidence in Avalanche-based projects.

3. Market Volatility

   AVAX’s recent 14.53% monthly volatility highlights its sensitivity to broader crypto market trends.

Conclusion

A

Image Credit: blockchain.news