AVAX price rallies after Avalanche development incentive and mainnet upgrade announcement
2024.09.26 16:03
AVAX, the native token of the Avalanche ecosystem, has shown resilience, rising 3.45% over the last 24 hours amid increasing excitement about the blockchain’s first major upgrade.
According to data from Cointelegraph Markets Pro and TradingView, the AVAX token smashed through the barrier posed by the 200-day exponential moving average (EMA) on Sept. 26 to reach an intraday high of $29.10. At the time of publication, the layer 1 token trades at $28.91, up 10% over the last week and 12.5% over the last 30 days.
AVAX/USD daily chart. Source: TradingView
Several factors behind AVAX’s bullishness include developments surrounding the upcoming Avalanche9000 upgrade, a surge in network activity and a strengthening market structure.
Avalanche’s $40M grant program boosts AVAX price
The Avalanche Foundation, the organization that supports initiatives that foster the development and adoption of the Avalanche blockchain network, has announced the launch of a $40 million grant program to support developers building layer-1 blockchains on the Avalanche network.
Source: The Avalanche Foundation
Christened Retro9000, the program is aimed at encouraging developers to build on the Avalanche network ahead of the much-anticipated Avalanche9000 upgrade.
On Sept. 3, the Foundation provided details of Avalanche9000 terming it as the “largest network upgrade” since the blockchain’s mainnet debut in September 2020 and is set to foster scalability, enhance cost-efficiency and increase developer experience.
As the network becomes more attractive for developers and other users, there might be increased demand for AVAX and a potential upward trend in its price.
Improving market structure and surge in network activity back AVAX’s uptrend
From a technical perspective, AVAX trades above an important demand area stretching from $27 to $28.65. Note that the 200-day EMA lies within this zone, suggesting that AVAX price sits on relatively robust support on the downside.
Buyer congestion around the said support level is likely to provide the tailwinds required to propel AVAX higher. If this happens, the price of the token may rise toward the May 22 range high of $41.78, representing a 42% uptick from the current levels.
AVAX/USD daily chart. Source: TradingView
The significance of this support zone was reinforced by onchain data from IntoTheBlock. Its in/out of the money around price (IOMAP) model showed that AVAX sat on relatively robust support compared to the resistance it faced in its recovery path.
For example, the 200-day EMA at $28 lies within the $27.51 and $28.44 price range, where approximately 7.7 million AVAX were previously bought by roughly 191,230 addresses.
AVAX IOMAP chart. Source: IntoTheBlock
Further validating the positive outlook for AVAX was total value locked (TVL) data that reflects growth within the project’s ecosystem. Analysing TVL data helps in understanding investor and developer interest in a blockchain. TVL is similar to bank deposits for decentralized finance (DeFi) projects and may influence the market’s direction.
According to data from DefiLlama, Avalanche’s TVL has been increasing in tandem with the price, rising from $717.4 million on Aug. 5 to the current value of $1 billion, representing a 43.5% increase. The AVAX price has increased by more than 50% over the same period.
Total value locked on Avalanche. Source: DefiLlama
This increase in TVL is a sign of increasing user interaction with the blockchain which leads to growing demand for the AVAX token. High demand is usually a precursor for substantial price growth.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
