Avalanche: How Institutional Interest Helped AVAX’s Price
AVAX rallied +10% in a 24-hour period, effectively erasing the losses of early August. The rally may have been fueled by recent upgrades from Grayscale and Franklin Templeton.
Avalanche [AVAX] soared 10% on August 22nd, ranking second among the top daily gainers on CoinMarketCap. The latest rally extended AVAX’s rally gains to 30%, bringing it back to $25 and effectively erasing all of its early August losses.
AVAX could go even higher, as there was room for further upside potential as the RSI (Relative Strength Index) was not overheated (not in overbought territory).
With bitcoin [BTC] still range bound, what was the catalyst for AVAX’s massive spike on Thursday?
Did Grayscale and Franklin Templeton Drive AVAX?
The AVAX rally coincided with two major updates to the Avalanche network. First, Grayscale added AVAX to its crypto products with a single crypto trust – the Grayscale Avalanche Trust ($AVAX).
The impact of blockchain on RWA (real-world asset) tokenization led to the addition of AVAX to its products, according to Rayhaneh Sharif-Askary, Grayscale’s head of products and research:
“Through its key strategic alliances and unique multi-chain structure, Avalanche is playing a pivotal role in the advancement of RWA tokenization.”
Indeed, Avalanche’s RWA segment has begun to ramp up, with the latest player being Franklin Templeton’s tokenized U.S. Treasury bond, which is expanding to the blockchain.
The prolonged and successful recovery and reversal of all August losses may have been driven by the aforementioned positive updates. The altcoin also experienced a massive spike in positive sentiment. It reached an annual high as the price trended higher.
This suggests that recent updates have boosted speculators’ outlook on the altcoin. If the bulls continue, the $30 level could be the next target.
The positive outlook is supported by AVAX’s recovery from the $25 level, which was a key support level in June and July. Therefore, a determined defense of support could see AVAX target $30. Commenting on Grayscale’s decision to upgrade AVAX, Ava Labs President John Wu called the upgrade a “major milestone.
Avalanche Surges 30% in 7 Days: Will AVAX Test $30 Resistance Zone Next?
Since August 16th, the Avalanche cryptocurrency has gained a little over 30%. Technical analysis showed that these gains could continue for a few more days. The price drop in May and June from $41.8 to $23.51 was used to plot one set of Fibonacci levels (yellow), while the drop from $33 to $17.29 was used to plot another (blue).
The last drop highlighted $29.64 as an important resistance level. This was an area of bounce for the Avalanche cryptocurrency in April, but turned into resistance in June. In addition, the $37.5 area is also a major resistance zone.
The move above $24 after testing the 23.6% retracement level was encouraging in the short term. It promised a move towards $30 resistance. However, traders may want to temper their bullish expectations. The CMF was above +0.05, indicating strong buying pressure. The bullish momentum is reflected in the daily RSI. The price is above its moving averages.
The liquidation heat map showed a concentration of liquidity just below the USD 28 level and around the USD 30 level. Combined with the momentum and demand for AVAX, the price should move higher.
Magnetic zones of liquidity attract the price, and if Bitcoin [BTC] decides to break above the $66,000 level, Avalanche could also see a sustained rally to the upside due to the bullish sentiment in the overall market.
By Leonardo Perez