AVAX, the native token of the Avalanche ecosystem, has shown resilience, rising 3.45% over the past 24 hours amid rising expectations for the blockchain’s first major upgrade.
According to data from Cointelegraph Markets Pro and TradingView, the AVAX token broke the 200-day exponential moving average (EMA) barrier on September 26, reaching an intraday high of $29.10. At the time of publication, the layer 1 token is trading at $28.91, up 10% over the past week and 12.5% over the past 30 days.
AVAX/USD daily chart. source: TradingView
Several factors supporting AVAX’s strength include developments surrounding the upcoming Avalanche9000 upgrade, a surge in network activity, and strengthening market structure.
Avalanche’s $40 million grant program boosts AVAX prices
The Avalanche Foundation, an organization that supports initiatives that foster the development and adoption of the Avalanche blockchain network, announced the launch of a $40 million grant program to support developers building layer 1 blockchains on the Avalanche network.
Source: More Avalanche Foundation
Christened Retro9000, this program aims to encourage developers to deploy Avalanche networks ahead of the highly anticipated Avalanche9000 upgrade.
On September 3, the foundation provided details about Avalanche9000, which it called “the biggest network upgrade” since the blockchain’s mainnet debut in September 2020 and will drive scalability, increase cost efficiencies, and improve the developer experience. .
As the network becomes more attractive to developers and other users, demand for AVAX will likely increase and its price will rise.
Improved market structure and surge in network activity support AVAX’s upward trend.
From a technical perspective, AVAX is trading above an important demand zone ranging from $27 to $28.65. Note that the 200-day EMA is within this area. This suggests that AVAX price has relatively solid bearish support.
A rush of buyers around that support level will likely provide the tailwind needed to propel AVAX higher. If this happens, the token price could rise to its May 22 high of $41.78, a 42% increase from current levels.
AVAX/USD daily chart. source: TradingView
The importance of this support zone is reinforced by on-chain data from IntoTheBlock. According to the Institute of the Money Around Price (IOMAP) model, AVAX maintains relatively solid support compared to the resistance it faces on its recovery path.
For example, the 200-day EMA of $28 is in the $27.51 and $28.44 price range, and approximately 7.7 million AVAX was previously purchased from approximately 191,230 addresses.
AVAX IOMAP chart. Source: IntoTheBlock
Further substantiating the positive outlook for AVAX was Total Value Locked (TVL) data reflecting growth within the project ecosystem. Analyzing TVL data helps us understand investor and developer interest in blockchain. TVL is similar to bank deposits in decentralized finance (DeFi) projects and can influence market direction.
According to data from DefiLlama, the Avalanche’s TVL has increased along with its price, increasing 43.5% from $717.4 million on Aug. 5 to a current valuation of $1 billion. AVAX price rose more than 50% during the same period.
Total value locked in an avalanche. Source: DefiLlama
This increase in TVL is a sign of increasing user interaction with the blockchain, leading to increased demand for AVAX tokens. High demand usually portends significant price increases.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.