Can Avalanche [AVAX] return huge gains? Here’s what to know

AVAX

As a seasoned analyst with over two decades of experience in the financial markets, I have seen trends come and go. The current outlook for Avalanche [AVAX] is particularly interesting, as it appears to be setting up for a potential rally above $100 in the long term, based on historical trends and fundamental catalysts.

AVAX (Avalanche) is currently on the mend after a widespread market dip pushed its value to $17.29, a level last reached in November 2023.

Currently, the price of AVAX is up by 2.05% and stands at $21.07. This increase in value has pushed its market capitalization above $8.2 billion. Moreover, there’s been a 30% surge in trading volume, suggesting that the cryptocurrency could be preparing for an upward trend.

AVAX Prepares for a surge to $100

Crypto expert Kaleo pointed out that the increasing Ethereum-to-Bitcoin (ETH/BTC) ratio could signal a boost for Layer 1 (L1) blockchains using the Ethereum Virtual Machine (EVM), such as Avalanche, potentially leading to an upward trend.

The ETH/BTC ratio indicates Ethereum’s [ETH]performance compared to Bitcoin [BTC]. An increase in the ratio suggests that Ethereum is appreciating faster than Bitcoin, or Bitcoin is depreciating while Ethereum remains stable or grows.

As a researcher, I’m noticing a shift that seems to signal growing market traction and investor interest towards Ethereum and related platforms such as Avalanche. This development could make these platforms increasingly appealing to potential investors.

In a graph, Kaleo highlighted that AVAX is at a significant turning point reminiscent of the one preceding the 2021 surge which peaked at $147.

Can Avalanche [AVAX] return huge gains? Here’s what to know

In the words of the analyst,

“Pump to start the year, bleed off, send to $100+.”

In simpler terms, while technical trends suggest a positive perspective, Kaleo also pointed out a substantial underlying factor that could fuel this predicted rise towards the anticipated zone.

He wrote,

As an analyst, I’m sharing that the significant AVAX token vesting event (amounting to 9.45 million AVAX or approximately $200 million) is scheduled for August 20th. Following this event, there will no longer be any tokens left in reserve for distribution to our team and strategic partners.

The last step, or “unlock”, is interpreted as a positive signal, implying maturity and stability in Avalanche’s approach to its coin distribution.

Enhancing investor trust, it helps maintain the token’s value by minimizing abrupt increases in circulating supply.

While Kaleo’s view on AVAX is optimistic, AMBCrypto has examined other fundamental indicators.

Fundamental outlook on Avalanche

In terms of Avalanche’s core aspects, AMBCrypto analyzed its active positions (open interest) and the market-influencing OI-adjusted Funding, revealing conflicting trends within the market at the moment of report.

Since August started, the OI-weighted Funding Rate has generally been at a level below zero, currently standing at -0.0306%.

Can Avalanche [AVAX] return huge gains? Here’s what to know

When the Overall Intervention (OI) Funding Rate is mostly negative, it suggests a pessimistic outlook, or ‘bearish sentiment’, because in this scenario, individuals holding short positions are paying fees to those with long positions. This payment indicates that these short position holders anticipate the asset’s price will fall.

Conversely, the Open Interest has seen a significant increase over the last few days, starting from August 5th, a day when AVAX reached its lowest point for the year 2024.

Until press time, the Open Interest has seen an 8.14% increment, valued at $202.11 million.

A rise in Open Interest often indicates fresh capital flowing into the market and increased involvement, potentially resulting in improved liquidity and a possible price upward trend due to more participants.

2024-08-13 23:36

AVAX Prepares for a surge to $100

Fundamental outlook on Avalanche

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