In a bowl, combine milk and sriracha. Add the chicken pieces and let soak for at least 30 minutes (up to 4 hours).
In a separate bowl, whisk together flour, powdered sugar, paprika, garlic powder, chili powder, salt, and pepper.
Remove chicken from milk mixture, dredge in the seasoned flour, and shake off any excess.
Arrange on a well-oiled sheet pan, drizzle lightly with avocado oil, and bake at 415°F for 15 minutes, flipping halfway through.
Ensure chicken is fully cooked (internal temperature 165°F).