Avalanche (AVAX) price turned bullish after spending close to six months within a downtrend. This uptick came after it reached a nine month low of $17.29 on 5 August which could have marked its 2024 market bottom. Incidentally, on 5 August most major cryptocurrencies including bitcoin lost much value. Nevertheless, from that low AVAX gained much value. For instance, during the past two weeks the AVAX/USDT price rose by 45% to reach $25.25.
Like most cryptocurrencies AVAX experienced a flash crash on 18 August when its price dropped to $18. At the time of writing, AVAX is trading at $26.75 after gaining by 1.5% within the last 24 hours. Notably, its price surged by 28.7% within the last two weeks as the next graph shows.
AVAX Monthly Price Chart – CoinGecko
The AVAX price dip that occurred on 5 August is visible followed by marginal gains within the following two weeks before the price up thrust that occurred on the 21st. In the Saturday morning session the cryptocurrency gained by 3.5% which helped it to overcome some key resistance levels that had persisted for more than 5 months. However, the price surge might have stalled as its charts on various timeframes are showing bearish outlooks. The next chart illustrates its market state.
Avax Monthly Price Chart – CoinGecko
As seen on the graph, a doji has formed a swing top. If that stands to be the case the asset may experience a pullback or a strong correction. There are a number of reasons that could have led to the on-going AVAX rally. First, the general bullish crypto market could have contributed much to its rally.
Second, several developments took place on the blockchain within the last weeks. For example, on 22 August Franklin Templeton, a global asset investment company, launched its fund, Franklin OnChain U.S. Government Money Fund (FOBXX), on the Avalanche network. FOBXX which was launched in 2021 became the first U.S.-registered mutual fund to use blockchain for its transactions. Such a development has helped create confidence among the investors. Oftentimes that can also attract more investment on the network.
What is also interesting to note is that one share of the $420 million fund is equivalent to one Benji Token. The investors can get access to the share through the BENJI application. By utilizing the blockchain FOBXX aims to attract more institutional investors. The fund has brought much utility to the blockchain. Commenting on this Avalanche said, “Benji wallet holders may now convert USDC stablecoin to fund their investment in shares of FOBXX and may transfer shares peer-to-peer on the public blockchain. In the future there may be additional utility for the fund such as secondary market trading and collateral mobility.”
The other trigger for AVAX price jump was Grayscale’s launch of an Avalanche Trust. The Grayscale Avalanche Trust is a fund that is solely connected to the AVAX cryptocurrency. The announcement that was made on 22 August definitely caused the coin to rally. In simple terms, the fund enables investors to gain exposure to the Avalanche token without directly owning the cryptocurrency. This means that the shares of the fund will track the price of the asset.
Regarding this Grayscale said, “Grayscale Avalanche Trust is one of the first securities solely invested in and deriving value from the price of Avalanche (“AVAX”) that enables investors to gain exposure to AVAX in the form of a security while avoiding the challenges of buying, storing, and safekeeping AVAX directly. Shares (based on AVAX per Share as indicated below) are designed to track the AVAX market price, less fees and expenses.” Despite the fact that the Grayscale investment and the news of Franklin Templeton integrating its fund with Avalanche are not fundamentals that could have influenced its price uptick they helped to create a positive market sentiment about AVAX.
What is left to the investors is to keep an eye on how the asset price will behave in the coming days. It is very important to track the changes in its volume as well. Also, it is essential to note that AVAX’s Fear and Greed Index is neutral since it has a reading of 54. If its price breaks above $ 28.02, which is the next key level, it may rally further towards $29.77. However, there is also a chance that its price may plunge below $26, 27 which is the next critical support level. If that happens it may fall further down towards $24.52.
Going forward, Changelly forecasts that the AVAX price may rise by 9.1% to reach $29.84 by 26 August. It also forecasts that its value could also increase by 220% by September this year. However, AVAX is not the only cryptocurrency which is trending upward. Several other coins and tokens like Solana and Toncoin are in an uptrend.
