Avalanche TVL increased by 40% quarterly, breaking through 1.5 billion USD! Derivation positions surged, can it break through the key resistance of 28 USD? | AVAX price prediction

Avalanche (AVAX) ecosystem is experiencing strong growth, with the total locked value (TVL) in DeFi nearly rising by 40% after the Octane upgrade, reaching 1.5 billion USD, highlighting the market's recognition of faster transactions, lower fees, and optimized experiences. On the technical side, AVAX has broken through the descending trend line and formed a double bottom pattern, now challenging the key resistance zone of 26-28 USD. The derivatives market is also active, with open interest (OI) rising by 15% to 835 million USD this week, indicating bullish expectations among traders. However, the sharp decline of 33.93% in new on-chain addresses, along with a drop in social activity, creates a divergence with the price rise, raising concerns for sustained upward movement. This article analyzes the key points in the Bull vs Bear Battle.

Ecosystem Driven: TVL Surge Confirms Upgrade Effectiveness Avalanche's recent core upgrade Octane has shown significant effects:

• Strong Rise in TVL: The total locked value in DeFi ( TVL ) saw a nearly 40% quarter-on-quarter surge, surpassing the $1.5 billion mark, and leaping to the forefront of the public chain sector.
• Continuous Capital Inflow: The upgrade has brought improvements in trading speed, reduced Gas fees, and optimized user experience, which have become key catalysts for attracting capital.
• Sustainability in Doubt: Is the current rise the starting point of ecological prosperity or a short-term profit realization? Continuous observation of subsequent capital inflows is needed.

Derivation Frenzy: Surge in Open Contracts Hides Volatility Risks The bullish sentiment in the derivatives sector is fully evident:

• OI surged significantly: Over the past week, the open interest (OI) increased by more than 15%, reaching $835.4 million, reflecting a massive influx of funds into the AVAX derivation market.

  

• Speculative sentiment heats up: An increase in OI is usually accompanied by a rise in speculative interest, which may provide leverage for the spot price rise.

• Double-Edged Sword Effect: High leverage positions may trigger a chain reaction of liquidations and exacerbate volatility if there is a reversal in sentiment. The current steady growth of OI indicates trader confidence, but it requires support from spot demand to sustain the rise.

Technical Breakthrough: Double Bottom Formation, Battle at $28 Resistance AVAX price trend shows positive technical signals:

• Bottom Confirmation: Successfully formed a classic "double bottom" reversal pattern and effectively broke through the long-term downward trend line resistance.

• Key Test: The price is currently hovering around the historical strong resistance zone of 26-28 dollars, which has suppressed rebounds multiple times in the past. The double bottom pattern indicates potential for a trend reversal, but it needs to effectively close above 28 dollars on the daily chart to confirm.

• Bull vs Bear Boundary: If successfully broken, the upward space opens; if it encounters resistance and falls back, it may retest the support below (such as the $22-24 area). The inflow of DeFi funds and the buying pressure from derivation are the key driving forces for the breakthrough.

  

Emerging Concerns: Decline in On-chain Activity Contrasts with Social Heat Data reveals potential contradictions:

• On-chain activity shrinks: The number of new addresses in the past 7 days plummeted by 33.93%, and the number of active addresses decreased by more than 10%, in stark contrast to the rise in TVL and prices, suggesting that the current market may be driven by the rotation of existing capital rather than by new user growth.

  

• Social Heat Cooling: Despite the price rise, AVAX Social Dominance ( Social Dominance ) has dropped to 0.419%, with a significant decline in discussion heat.

• Subtle Improvement in Sentiment: The weighted sentiment index ( Weighted Sentiment ) slightly rose to +0.115, indicating that holders are leaning towards a bullish sentiment, but the lack of retail attention may limit the rise in momentum. The long-term health of the ecosystem requires genuine user growth and enhanced interaction.

  

Conclusion: Avalanche has made significant progress in terms of TVL and price with the Octane upgrade. The technical double bottom pattern and bullish bets in derivation provide the potential to break through the $28 resistance. However, the stagnation of on-chain user growth and the decline in social heat pose major concerns. If real users cannot be attracted, the sustainability of the current rise will face challenges. Investors should focus on: 1) Whether the $28 resistance area can be effectively broken and stabilized; 2) Whether new address/active address data can rebound from the bottom; 3) Whether social discussion heat can form a positive resonance with the price. Only by achieving a "double hit" of technological breakthroughs and improvements in ecological fundamentals can AVAX unlock a more certain upward trend.