In a large mixing bowl, mix together ground chicken, almond flour, egg yolk, garlic, onion powder, salt, and pepper until well combined. Using heaping tablespoonfuls of the mixture, shape into balls and place aside.
Heat avocado oil over medium-high heat in a large skillet. Brown meatballs on all sides and transfer to a plate.
Heat 1 tbsp of avocado oil over medium-heat heat in the same skillet. Add onions and cook, stirring, until they begin to soften. Add mushrooms and cook, continuing to stir, until the onions are translucent and the mushrooms have softed. Add garlic and cook until fragrant, just 30 seconds or so.
Add balsamic vinegar and lemon juice and use a wooden spoon to scrape up all the browned bits on the bottom of the pan. Stir in chicken broth and coconut milk. Add the meatballs and stir to combine. Bring to a simmer; cover and let cook until a meat thermomter reads 165F in the center of the meatballs, about 8 - 10 minutes.
In a small bowl, whisk together arrowroot powder and about a tablespoon of water. Whisk this into the sauce. Let cook until thickened, just another minute or 2. Season with salt and pepper to taste.
Sprinkle with fresh parsley before serving.