AVAX Price Forms Megaphone Pattern as Avalanche Prepares Granite Upgrade: A Technical and Fundamental Deep Dive

Avalanche (AVAX) Navigates Bearish Pressures Amidst Critical Network Upgrade and Bullish Chart Formation

The Avalanche (AVAX) token finds itself at a critical juncture. On October 22, its price continued a pronounced downtrend, crashing below the key $20 support level for the first time this week and marking a 45% tumble from its September peak. This decline coincides with a fading broader crypto market recovery, creating a challenging environment for the layer-1 token. However, a giant megaphone pattern on the technical charts points to a potential rebound, while fundamental developments, most notably the impending Granite testnet launch, provide a counter-narrative of long-term growth and innovation. This convergence of technical signals and foundational progress paints a complex picture for AVAX as it navigates the current bear market.

Avalanche Price Plunge Defies Strong Fundamental Growth

Despite the significant price depreciation this year, which has seen AVAX move into a bear market, the underlying Avalanche network has been witnessing substantial growth and adoption. The token's price crash has occurred against a backdrop of several major bullish catalysts, creating a divergence between on-chain activity and market valuation.

Avalanche has solidified its position as one of the fastest-growing layer-1 chains in the cryptocurrency industry. This growth is quantifiably demonstrated by its user base; monthly active addresses on the network have jumped to over 75 million in the past five months. This metric indicates robust and expanding usage, suggesting a healthy ecosystem that is attracting developers and users despite unfavorable market conditions for its native token.

Furthermore, the Avalanche network is implementing a deflationary mechanism through its fee-burning model. The protocol burns all transaction fees, permanently removing thousands of AVAX tokens from circulation each month. As network activity and transaction volume grow, the rate of this token burn increases, applying a consistent, if gradual, downward pressure on the total supply. This mechanism is designed to create scarcity over the long term, contrasting with the current selling pressure in the markets.

Strategic Partnerships and Institutional Adoption Continue Apace

The bear market for AVAX price has not stalled the network's business development efforts or its penetration into traditional sectors. Avalanche has secured and activated major partnerships with globally recognized entities, underscoring its credibility and utility beyond speculative trading.

Notable collaborations include partnerships with automotive giant Toyota, Anthony Scaramucci’s investment firm Skybridge, and the international soccer governing body FIFA. These partnerships are not merely symbolic; they represent concrete use cases and integration points for the Avalanche blockchain, bringing its technology to millions of potential new users across industries like automotive finance, investment management, and sports fan engagement.

Additionally, Avalanche is participating in a foundational financial initiative as one of the blockchains selected for Wyoming State’s stablecoin project. This involvement with a U.S. state-level regulatory and financial framework highlights the network's compliance-friendly approach and its potential role in the future of digitized public finance. These developments collectively form a strong fundamental base that often precedes price appreciation when market sentiment eventually shifts.

The Granite Upgrade: A Leap Forward in Scalability and Functionality

The most imminent and technically significant development for the Avalanche network is the upcoming Granite upgrade. Developers are set to activate the Granite testnet on Wednesday of next week, with a mainnet deployment to follow after successful testing and validation.

The Granite upgrade is not a minor iteration; it introduces a suite of enhanced features designed to improve the network's core performance and expand its capabilities. Key improvements include:

• Enhancing Interchain Messaging Verification: This will bolster security and reliability for communication between Avalanche and other connected blockchains, a critical feature for its interoperability and position within the broader crypto ecosystem.
• Unlocking New Biometric Use Cases: This feature points toward more sophisticated identity verification and security applications directly on-chain, potentially opening doors for enterprise adoption in sectors requiring secure digital identity.
• Boosting Transaction Speeds with Dynamic Minimum Block Times: This optimization allows the network to adjust block times dynamically, potentially increasing throughput and efficiency during periods of high demand, thereby improving scalability and user experience.

Historically, major network upgrades have served as positive catalysts for cryptocurrency prices. For instance, Ethereum (ETH) witnessed a price surge following its Pectra upgrade. Similarly, BNB (BNB) price experienced significant upward momentum after its Pectra, Lorentz, and Maxwell upgrades. While past performance is not indicative of future results, this pattern suggests that fundamental technological improvements can positively influence market perception.

AVAX Price Technical Analysis: The Megaphone Pattern Explained

From a technical analysis perspective, the daily chart for AVAX reveals a clear narrative of recent bearish dominance but also hints at a potential reversal. The price has moved from a high of $36 in September to approximately $19.56, decisively breaking below the 50-day Exponential Moving Average (EMA). The 50-day EMA is a widely watched momentum indicator, and trading below it typically signals that bears are in control in the short to medium term.

However, superimposed on this downtrend is the formation of a distinct megaphone pattern (also known as a broadening formation). This pattern is characterized by two ascending and diverging trendlines that connect higher highs and lower lows, creating a shape that widens over time. The megaphone pattern indicates increasing volatility and disagreement among buyers and sellers about the asset's true value.

Crucially, the pattern often resolves with an upside breakout. As the price oscillates within this expanding range, it is currently hovering near the lower trendline support. A rebound from this level could propel the price higher in the coming weeks, with technical analysis pointing toward a potential move toward the psychological resistance point at $30. It is important to note that this bullish view would be invalidated if the price were to break and sustain below the lower support trendline of the megaphone formation.

Strategic Conclusion: Navigating Volatility with a Focus on Fundamentals

The current state of Avalanche presents a tale of two timelines. In the immediate short term, AVAX is grappling with strong bearish momentum, reflected in its broken support levels and position below key moving averages. The formation of the megaphone pattern introduces a significant element of technical uncertainty but also outlines a clear path for a potential recovery should buyers step in at current levels.

On a longer timeline, the fundamentals of the Avalanche network appear robust and are actively improving. The massive growth in active addresses, strategic high-profile partnerships, a deflationary token model, and the impending Granite upgrade collectively build a compelling case for the network's resilience and future potential. The Granite upgrade, in particular, represents a meaningful step forward in scalability and functionality that could enhance Avalanche's competitive edge in the crowded layer-1 landscape.

For readers and investors, the key takeaways are to monitor two primary areas: first, the technical reaction at the lower boundary of the megaphone pattern for signals of either a rebound or further breakdown; and second, the successful deployment and initial performance of the Granite testnet next week as an indicator of smooth technological progress. While market sentiment remains fragile, Avalanche's continued execution on its development roadmap suggests that its current price struggles may not fully reflect its underlying growth trajectory and technological ambitions.