Avalanche has seen its token AVAX rise rapidly over the past 30 days, entering the top 10 tokens by market capitalization. This rally did not come out of nowhere, as activity began to pick up on the Avalanche network once again. During this period, open interest also increased rapidly, eventually reaching an all-time high.
Avalanche open interest increases to $413 million
On Tuesday, Avalanche open interest rose to its highest level since launch after AVAX surged to $40. Open interest continued to rise for over a month, reaching $413 million on December 12. The surge coincided with a surge in prices, hitting daily highs almost every day in December.
The surge began in October after hitting about $70 million in a month. However, in November, there was a noticeable change in open interest as traders began taking positions in digital assets.
Source: Coinglass
Between November and December, AVAX open interest increased by more than 400%. On Tuesday alone, open interest increased another 19%, bringing total Avalanche open interest across all exchanges to 11.43 million AVAX.
73% of all open interest actually comes from just two exchanges. Binance and Bybit. According to data from Coinglass, Binance accounted for 44% of total OI with $184 million (4.54 million AVAX), and Bybit accounted for 28.8% of total OI with $119.67 million (2.95 million AVAX). Occupy BingX, OKX, and Bitget ranked in the top five with $50.37 million, $43.7 million, and $41.8 million, respectively.
Token price retraces to $36 | Source: AVAXUSD on Tradingview.com
Does OI send AVAX price $100?
Avalanche open interest has soared to an all-time high, but there is still a long way to go before the AVAX price reaches its all-time high of $146. Nonetheless, the increase in open interest is still very bullish relative to the price.
As evidenced by historical performance, the price of AVAX often rises whenever open interest increases. This is when the price of an altcoin rose by more than $100 between 2021 and 2022 before eventually crashing in 2022.
If Avalanche open interest continues to increase from here, we expect AVAX to follow. A break in OI above $500 million will undoubtedly see the altcoin hit the coveted $50 level once again. However, $100 is still a long way off and will most likely be reached around 2024.
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