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- AVAX has enjoyed upward movement validated by a critical horizontal area as support, raising optimism among investors about higher gains.
- As investors contemplate whether to buy more ahead of a breakout or take profits, experts agree that the long-term view is bullish.
Avalanche (AVAX) has in the past 7 days earned more than 15% to breach the $40 resistance level. AVAX has enjoyed upward movement validated by a critical horizontal area as support, raising optimism among investors about higher gains.
After impressing for the past couple of weeks, the weekly Relative Strength Index (RSI) gives a mixed reading. Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions. This allows them to decide whether to buy or sell. With AVAX maintaining upward momentum since January 22nd, investors are cautious of an imminent correction.
At the time of writing, AVAX is trading at $39.63 after dropping by nearly 4% in the last 24 hours. On the weekly chart, the altcoin is up by 16%.
The price reaction coincides with Avalanche’s highly anticipated Durango upgrade that went live on the Fuji testnet on February 13th at 11 AM ET, as announced by Ava Labs’ Head of Engineering, Patrick O’Grady. This upgrade promises trustless interactions across different blockchains and a major boost to network scalability, paving the way for a more interconnected and efficient Avalanche ecosystem.
At 11 AM ET, the proposed Durango Upgrade successfully activated on the #Avalanche Fuji Testnet
TL;DR 🌀🌀🌀 (Fuji C-Chain can now verify incoming Avalanche Warp Messages)https://t.co/ISuhFvXII6
— Patrick O'Grady 🔺 (@_patrickogrady) February 13, 2024
With a market cap of $14.5 billion, the altcoin is ranked tenth, making it one of the most desirable cryptocurrencies. However, after the recent rejection, a correction looks likely at the $40 mark. A sign of this is the recent decline in Avalanche network activity.
According to recent data posted by AVAX Daily on social platform X, Avalanche’s Contract Chain (C-chain), primarily designed for executing smart contracts, witnessed a notable drop in transaction volume.
🔺#Avalanche C-chain weekly on-chain status🔺
🔥Network Status
Transactions: 7.66M -16.88%
Max TPS Observed: 215 -228.84%
Gas Used: 6.77T -2.74%🔥Staking:
Staking ratio: 55.88%
Staking rewards: 7.66%
Total validators: 1,722
Total delegations: 67,510#AVAX $AVAX pic.twitter.com/faeJp95CpA— AVAX Daily 🔺 (@AVAXDaily) February 6, 2024
Another key concern is the release of AVAX tokens, which could flood the market. Several crypto projects will release a combined $900 million worth of vested tokens this month, with Avalanche leading the way with 9.5 million AVAX tokens worth over $300 million. There is, however, investor confidence that the market will be able to absorb the liquidity and maintain its upward trajectory.
Scheduled for February 22nd, this will be a critical test, and if the $40 level is broken, this will push AVAX above $50.
Although AVAX has impressed in recent weeks, it remains a long way from its all-time high of $145, reached about two years ago. Interestingly, this was achieved just a year after the token’s all-time low of $2.80. This is a clear illustration of the token’s potential during a bull market.
