On May 28, 2025, the 1-day AVAX/USDT chart on Binance formed a bearish pennant pattern. This pattern typically appears after a sharp downward move, followed by consolidation inside converging trendlines. It often signals continuation in the direction of the prior trend—downward in this case.
If confirmed, this bearish pennant could push Avalanche (AVAX) down by 61% from the current price of $23.38 to the projected target around $8.95.
The chart shows a steep drop earlier in the year, which formed the flagpole. Since then, the price has been moving inside a narrowing triangle structure—this is the pennant. The 50-day Exponential Moving Average (EMA) currently sits at $22.32, just below the price, offering minor support.
However, the overall structure favors a breakdown. The trading volume remains relatively low during the consolidation phase, which matches classic pennant behavior. A high-volume break below the lower trendline would confirm the pattern and set off the next leg down.
If sellers gain momentum and AVAX breaks below the pennant support, the move toward $8.95 would align with the height of the flagpole projected downward.
AVAX RSI Stalls Near Neutral Zone as Momentum Flattens
This Relative Strength Index (RSI) chart for Avalanche (AVAX), dated May 28, 2025, shows the 14-period RSI line (purple) at 52.71, while the moving average (yellow) stands slightly above at 52.96.
Currently, AVAX trades in a neutral momentum zone, as the RSI hovers near the midpoint of 50. Since mid-May, the RSI has declined from over 60 and now moves sideways, reflecting weak directional bias. The proximity of both the RSI and its average confirms limited strength from either buyers or sellers.
Earlier in April and May, AVAX’s RSI crossed 60 multiple times, showing periods of bullish momentum. However, each surge failed to sustain long enough to breach the overbought zone above 70. Now, with no clear upward push, the price may face consolidation or reversal pressure.
If RSI falls below 50 again, it may signal the return of bearish momentum. Until then, the AVAX market remains indecisive, with momentum flattening and volume offering no clear support for a breakout.
Avalanche DeFi Activity Rises as Stablecoins and New Tokens Lead DEX Trading
Avalanche is seeing growing traction across decentralized exchanges (DEXs), with stablecoin pairs and newly launched tokens driving most of the volume. As of late May 2025, the AVAX ecosystem has expanded its DeFi presence, focusing heavily on trading pairs that involve major stablecoins.
This trend indicates increased adoption of Avalanche-based DEXs for stable and speculative asset swaps. Key contributors to the trading volume include USDC, USDT, and various AVAX-native tokens recently introduced through decentralized launch platforms.
While Ethereum remains dominant in total DEX volume, Avalanche is securing a strong niche by offering faster transaction speeds and lower fees. As a result, traders are moving to AVAX DEXs for routine swaps and new token entries.
Avalanche’s DeFi infrastructure has evolved with the integration of liquidity incentives and user-friendly interfaces, allowing smaller projects to launch and gain visibility. These developments support the protocol’s broader goal of becoming a high-performance Layer-1 hub for decentralized finance.
