AVAX, the native token of the Avalanche blockchain’s first layer, has surged 12% in the last 24 hours, making it the leader among the top 100 cryptocurrencies by market cap.
After nearly six months of decline, Avalanche (AVAX) is in the early stages of a potential trend reversal. The token hit a nine-month low of $17.29 on August 5. However, it has surged 48% over the past two weeks to $25.78.
According to crypto.news, at the time of writing, AVAX has a daily trading volume of around $511 million and a market cap of $10.4 billion.
While AVAX experienced a flash crash to $17.55 during Bitcoin’s correction to $49,500 on August 5, like many other altcoins, its performance has lagged the broader market since peaking at $65 on March 18.
The recent positive price movement of AVAX may be partly due to encouraging news. Investors have focused on the Avalanche token unlock schedule, noting that the frequency of token unlock events will decrease significantly after the end of 2024. Many believe that these unlocks create selling pressure and hinder the long-term growth of the ecosystem, which is critical to increasing the token’s value.
After 2024, only the #Avalanche Foundation will unlock tokens. All other unlocks will be done.
Unlocks on the blockchain are much more transparent than random token sales of other funds. #AVAX fund unlocks have set dates and happen on the blockchain, they are predictable and anyone can plan for them.… pic.twitter.com/DtsJnH3ElC
— REKTBuildr 🔺🔺🔺 (@rektbuildr) February 22, 2024
Additionally, on August 22, Grayscale Investments announced the launch of the “Grayscale Avalanche Trust,” giving investors access to the Avalanche ecosystem. That same day, global asset manager Franklin Templeton expanded its Franklin Onchain US Government Money Fund to the Avalanche network, responding to growing investor interest.
While these events, such as the token unlock schedule and the announcements from Grayscale Investments and Franklin Templeton, are not directly related to the fundamental value of AVAX, they have likely contributed to a more positive sentiment among investors, potentially boosting the token’s price outlook.
AVAX sees optimistic market sentiment
Currently, the price of AVAX is above the upper Bollinger Band at $24.79, which suggests that AVAX is trading outside of the typical range of recent price movements and indicates potentially strong bullish sentiment in the market. This position above the upper band may indicate excessive extension of price moves and may signal an impending correction or consolidation unless supported by additional buying pressure.
The relative strength index for AVAX is currently at 61.47, which is slightly above the neutral zone but still well below the overbought threshold of 70. This means that while the market is experiencing some bullish momentum, it has not yet reached the level that typically signals an imminent reversal due to overbought conditions.
The trading volume seen at 1.072 million AVAX reflects active participation and can be considered supportive of the current price rally, indicating genuine market interest rather than a false surge. Given the price rise above the upper Bollinger Band, coupled with a moderately high RSI and steady trading volume, the market dynamics around AVAX indicate a strong bullish undertone, but requires a close watch for signs of potential volatility or price corrections.
Investors and traders may want to consider watching for stability above the upper band or a potential pullback to the middle band at $21.58 as indicators of future price action, while maintaining a balanced outlook given the heightened market activity.
