In an unexpected turn of events within the cryptocurrency landscape, Avalanche’s digital asset, AVAX, surged by 10% to surpass $33 on Tuesday. This price movement stands in stark contrast to the broader market trend, which has been characterized by a downward trajectory. The gain brings AVAX’s overall increase to 21.5% from its recent low of $29, illustrating renewed institutional interest and confidence in this layer-1 blockchain solution.
The uptick in AVAX’s price can largely be attributed to strategic initiatives from the Avalanche Foundation aimed at enhancing its institutional appeal. Recently, the nonprofit organization disclosed plans to raise a substantial $1 billion via two U.S.-based crypto treasury firms. This fundraising effort is designed to facilitate the acquisition of millions of AVAX tokens directly from foundation reserves at reduced prices, increasing overall demand.
One of these initiatives is spearheaded by Hivemind Capital, which, along with advisor Anthony Scaramucci, is pursuing $500 million through a private investment in public equity (PIPE) deal. This was substantiated by the announcement that AgriFORCE Growing Systems is rebranding as Avax One to facilitate a treasury-focused on AVAX, aiming to raise an additional $550 million for the initiative.
The second treasury vehicle involves Dragonfly Capital as a key investor and targets an equal $500 million through a Special Purpose Acquisition Company (SPAC). Both of these strategies are expected to create sustained buying pressure on the AVAX tokens, enhancing overall liquidity in the market.
Interest in AVAX among institutional players has surged since early this year. This was highlighted by the offering of a crypto exchange-traded product (ETP) by the Swedish asset manager Vitune, which allows Finnish investors exposure to AVAX. Additionally, the global investment firm VanEck has applied to launch an Avalanche-specific exchange-traded fund (ETF), alongside Grayscale’s recent filing to convert its existing Avalanche Trust into an ETF. Such developments have further solidified the institutional momentum propelling the recent AVAX price rally.
Avalanche’s active blockchain environment further supports the asset’s bullish outlook. The platform has seen a substantial increase in total value locked (TVL), which has doubled from $1 billion in April to approximately $2.23 billion as of Tuesday. This spike in TVL indicates growing DeFi adoption, fueled by prominent protocols such as Aave, which alone boasts a TVL of $515 million.
The stablecoin market cap has also experienced a significant rise, currently positioned at $2.16 billion – an 81% increase over the past month. This combination of increasing TVL and market cap demonstrates heightened usage and liquidity across the Avalanche network, bolstering the case for a potential increase in AVAX pricing.
Technical analysis of AVAX reveals the formation of a rounded bottom pattern, signaling a classic bullish reversal. This pattern has emerged as the price has gradually climbed from July lows of approximately $17 to current levels. Notably, a substantial increase in trading volume has been observed, exceeding 100% within the last 24 hours, coupled with a 17% jump from lower levels, suggesting that buyers are gaining traction while sellers appear to be losing momentum.
For traders, the rounded bottom pattern outlines potential bullish price targets for AVAX. The first projected target is a return to the neckline at $55, indicating a 61% increase from current levels, while longer-term estimates suggest a possible target of $212, contingent upon favorable market conditions and continued adoption.
As Avalanche experiences significant growth amidst a bearish market, its focus on institutional partnerships and robust network activity positions AVAX as a token to watch in the developing cryptocurrency space.
