Avalanche [AVAX] continues to attract investors with rising on-chain activity.
At press time, Active Addresses surged, jumping from 30K to over 600K in just one week. This dramatic spike signaled increased engagement and growing adoption, reflecting deeper interest in DeFi, tokenization, and RWAs.
This rapid growth felt like a turning point for AVAX, with institutional interest likely to follow and fuel the momentum further.
However, despite the surge in activity, cooling futures market conditions and a weakening MACD suggested that AVAX might be in a dangerous zone. The question remained: would AVAX continue its climb, or was a deeper pullback imminent?
C-Chain momentum – A bullish indicator for 2026?
Grayscale observed that Avalanche’s C‑Chain gained momentum in late 2025, averaging 2.5 million on‑chain transactions over seven days. This growth highlighted the network’s long‑term strength and reflected increasing interest from both developers and users.
However, AVAX’s success depended on maintaining momentum. If the trend continued into January 2026, AVAX could have seen strong returns, especially with market support.
Assessing short-term bubble risk
As AVAX’s price hovered around $12, the short-term bubble risk remained low at 1, marked by green and blue zones. Historically, such cooling phases had been followed by sharp rebounds, fueling hope among investors.
Adding to this, the Futures Volume Bubble Map reflected a similar trend, suggesting that, while short-term activity cooled, a price reversal could be on the horizon. The green clusters had been followed by neutral, then heating, and finally, overheating phases.
If the market sentiment had shifted toward the bulls, AVAX could have been primed for a strong recovery.
AVAX price action and momentum indicators
At press time, AVAX showed a classic descending triangle pattern on the daily time frame, signaling a bearish continuation.
With MACD weakness and RSI near the lower boundary, the price may struggle to maintain support above $11.3. Should this level break, the decline could extend toward $8.60.
Nevertheless, reclaiming $18-$22 was a critical move for AVAX. If the market shifted positively, reaching $43 was possible, tapping the upper line of the descending triangle.
