- Avalanche Foundation plans to repurchase AVAX tokens from a defunct crypto project
AVAX held by LFG worth over $56 million
As a seasoned crypto investor with battle-hardened nerves and a portfolio that mirrors the rollercoaster ride of the digital asset market, I find the recent news about Avalanche Foundation repurchasing AVAX tokens from a defunct project to be quite intriguing.
In the past day, the price of Avalanche (AVAX) experienced a substantial increase. This growth wasn’t solely driven by broader market trends, but also as a result of an important advancement within its own ecosystem.
Today, headlines are buzzing about The Avalanche Foundation, as they’ve unveiled an important strategy to buy back AVAX tokens that originated from a closed cryptocurrency venture – This significant step represents a turning point for their platform.
Avalanche Foundation to repurchase AVAX
In a recent statement, the Avalanche Foundation disclosed that they have decided to buy back all the AVAX tokens they had earlier sold to the Luna Foundation Guard (LFG).
Pending approval by the bankruptcy court, this agreement is set to restore 1.97 million AVAX tokens back to the Foundation.
The Luna Foundation Guard (LFG) was responsible for overseeing the Terra ecosystem, which experienced a breakdown in May 2022. In an attempt to maintain the value of the algorithmic stablecoin TerraUSD (UST), LFG invested approximately $2.8 billion worth of cryptocurrencies; however, these protective measures ultimately did not prevent its downfall.
As reported by the LFG‘s stored information, AVAX represented more than 40% of their total reserves, with a value exceeding $137 million. Among other significant holdings in LFG’s portfolio are Bitcoin (BTC) and Binance Coin (BNB).
Positive market reaction to AVAX’s token repurchase
After the Avalanche Foundation shared their announcement on October 11th through their social media platform (previously known as Twitter), there was an instant impact on AVAX‘s price chart.
Over a 24-hour period, the value of AVAX increased by approximately 6.15%, rising from roughly $25 to $27. Currently, it’s being traded at more than $28, marking an additional 3% increase since then.
As a researcher, I’ve noticed that despite the promising bullish trend of AVAX, it still encounters some resistance, with its 200-day moving average hovering around the $30 price point. If AVAX manages to sustain its current upward momentum, as suggested by its Relative Strength Index (RSI), this resistance level could possibly transform into a supportive one in the future.
AVAX gains popularity and market momentum
Apart from its increased cost, Avalanche has also been gaining popularity as a leading asset in the current market trends.
According to data from Santiment, it was found that Avalanche (AVAX) ranked among the top four trending assets, boasting a 68% favorable opinion or sentiment.
Additionally, Avalanche (AVAX) was included in the top 15 digital assets based on market cap by CoinMarketCap. In the past 24 hours, it showed the most significant growth among the leading assets, increasing by approximately 9%.
To conclude, an examination of the overall Open Interest on Santiment revealed a substantial increase during the stated timeframe. Notably, the graph demonstrated that the Open Interest surged from approximately $292.6 million to around $312.4 million by October 11’s end.
At the time of writing, the Open Interest had a reading of over $322 million.
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2024-10-12 17:11