Clearing your avatar cache clears all the avatar item data you've downloaded, and then re-downloads the data.
You can clear your avatar cache by going to Settings and tapping Clear Cache under Avatar Data.
If you're having issues with your avatar display such as not being able to see your avatar, try clearing your avatar cache to re-download the data as this will likely resolve the issue.
Because all your avatar items will be re-downloaded when starting a stream etc. after the cache is cleared, there is no risk of losing any avatar items by using the clear cache feature.