After about 6 months of downtrend, AVAX price seems to be in the early stages of a trend reversal. On August 5, it was trading at a 9-month low of $17.29. In the past two weeks, the altcoin has gained 45%, reversing to $25.25.
AVAX’s plunge below $18 followed the same pattern as most altcoins during Bitcoin’s (BTC) correction to $49,500 on August 18, but AVAX has lagged the broader market since peaking at $65 on March 18.
Positive news may be partly responsible for the recent rise in AVAX prices. This week, AVAX investors have focused on the Avalanche token unlock schedule, noting that the number of token unlock events is rapidly decreasing after the end of 2024. Many investors believe that token unlocks create selling pressure and hinder the development of various types of long-term ecosystems that support the token’s value growth.
Only after 2024 #avalanche The Foundation unlocks the tokens. All other unlocks are complete.
On-chain unlocks are much more transparent than other underlying random token sales.#Abox Foundation unlocks have a set date, are recorded on-chain, are predictable, and can be planned by anyone.… pic.twitter.com/DtsJnH3ElC
— REKTBuildr 🔺🔺🔺 (@rektbuildr) February 22, 2024
On August 22, asset manager Grayscale Investments also announced the launch of a new investment fund for AVAX, the “Grayscale Avalanche Trust,” which provides investors with exposure to the network’s growing ecosystem.
On the same day, global asset management firm Franklin Templeton also expanded its Franklin Onchain US Government Money Fund to the Avalanche network. As Cointelegraph reported, “Launched in 2021, the fund will provide institutional investors access to Franklin Templeton’s blockchain-integrated record-keeping system, Benji Investments.”
While the token unlock and the Grayscale Investments and Franklin Templeton news are not necessarily fundamental events directly related to AVAX, the increase in positive sentiment may have influenced how investors feel about the price outlook for the altcoin.
relevant: Franklin Templeton Expands Blockchain Fund to Avalanche Network
From a price action perspective, the AVAX price spike coincides with Grayscale’s announcement, which briefly saw the funding rate turn positive and led to increased liquidations.
AVAX 24-hour volume and liquidations. Source: Coinglass
The important thing to watch for is the continued rise in spot buying, especially given that cryptocurrencies are notorious for their price movements based on news events, partnership announcements, and mainnet upgrades. As you can see below, this type of hype and hype generation is a process that crypto influencers and industry insiders are well aware of.
This week, three years ago, Avalanche Rush was announced. At the time, it was the most exciting and innovative incentive program ever.
continue? pic.twitter.com/FDWkQLb8P5
— Luigi D’Onorio DeMeo 🔺 (@luigidemeo) August 21, 2024
If spot buying volume continues or margin long positions increase significantly, AVAX can use the upper limit liquidity above the $25-$27 resistance level (as shown in the volume profile and integrated order book) to chase prices in the $28-$33 range.
AVAX/USDT, 1-day chart. Source: TRDR.io
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.