The price of Avalanche’s native token, AVAX, has seen a notable uptick of 10%, bringing its value to over $33 on Tuesday, despite a prevailing downturn in the wider cryptocurrency market. This surge comes on the heels of growing institutional interest and robust developments within the Avalanche ecosystem.
AVAX has rebounded impressively, rallying approximately 21.5% from a recent low of $29, indicating a renewed sense of confidence from investors. This momentum is particularly apparent as AVAX’s rise comes during a period where many cryptocurrencies are facing significant selling pressure.
Institutional Backing Fuels AVAX’s Growth
The Avalanche Foundation has undertaken strategic initiatives designed to enhance the token’s appeal to institutional investors. Notably, in early September, the nonprofit organization announced ambitious plans to secure $1 billion through two U.S.-based crypto treasury firms. These firms aim to acquire large quantities of AVAX tokens at preferential rates. One initiative, spearheaded by Hivemind Capital and advised by well-known finance expert Anthony Scaramucci, is expected to raise $500 million through a Nasdaq-listed vehicle in a Private Investment in Public Equity (PIPE) transaction. Another initiative will be facilitated through a special purpose acquisition company (SPAC), in collaboration with major investor Dragonfly Capital, with an identical fundraising goal.
The influx of capital from these treasury companies is anticipated to generate sustained buying pressure on AVAX, enhancing overall liquidity and supporting future price stability.
Interest in AVAX from institutional players has grown significantly since February. For instance, Swedish asset manager Vitune has launched a crypto exchange-traded product (ETP) providing Finnish investors exposure to AVAX. This was followed by notable applications from global investment firm VanEck seeking approval for an Avalanche-focused exchange-traded fund (ETF) and Grayscale’s recent efforts to transform its Avalanche Trust into an ETF.
On-Chain Metrics Reflect Robust Ecosystem Activity
The Avalanche network has witnessed extensive growth due to recent technical enhancements and an expanding range of applications. Following the Octane upgrade in April, transaction fees on the C-Chain were reduced by 98%, leading to a remarkable surge in average daily transactions to approximately 1.4 million by Q2—a 493% increase from the prior quarter. Additionally, the number of active addresses grew by 57%, reaching a total of 46,397.
In the last week of August, Avalanche achieved a record-breaking milestone, leading all blockchain networks with a stunning transaction growth of over 66%, culminating in an all-time daily high of 2.22 million transactions on August 31. Although transaction counts have slightly stabilized since then, they remain robust, with daily figures consistently exceeding 1.2 million, according to Nansen’s data.
The total value locked (TVL) on Avalanche also showcased impressive growth, doubling from $1 billion in April to approximately $2.23 billion on Tuesday—a 120% increase attributed to prominent protocols like Aave, which alone holds $515 million in TVL. Concurrently, the stablecoin market capitalization reached $2.16 billion, marking an 81% increase over the past month as tracked by DefiLlama.
Technical Indicators Suggest Bullish Trends
Technical analysis of AVAX’s charts reveals a rounded bottom pattern, a classic bullish formation indicating potential accumulation after a period of price consolidation. Since reaching lows of around $17 in July, the price has traced a gentle U-shaped base throughout September, supported by a remarkable over 100% increase in trading volume over the last 24 hours and a rise of 17% from Monday’s lows.
This technical setup suggests that upward momentum could lead the token towards a target of $55 in the near term, underscoring the potential for continued growth. As the cryptocurrency landscape evolves, AVAX’s solid performance amid challenging market conditions highlights its resilience and appeal to both retail and institutional investors alike.
