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Avalanche (AVAX)

AVAX Forms Falling Wedge Pattern, Is A Bullish Breakout Imminent?

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  • AVAX price has fallen over -30% the last week
  • AVAX Price has formed a falling wedge pattern
  • 100MA continues to act as support

Avalanche (AVAX) had an amazing run the last few weeks as prices surged over 200%. This price movement put AVAX price at a new high for the first time in many months. Investors have been taking a bullish stance on AVAX as it aims to solve a major problem within the crypto space. The solution AVAX offers is a highly scalable & efficient blockchain that allows for DeFi & dApps to be built upon it, similar to ETH. It also offers a bridge from the ETH blockchain to its own, which is a great solution for interoperability.

While looking at the last month of price action , we can see AVAX price has held a trend line very well. AVAX just bounced off this trend line a couple days ago & seems to be heading for another potential bounce. Over the last two weeks, AVAX price has formed a bullish falling wedge pattern (shown in blue).

If bulls manage to break & hold this falling wedge, price will then have to battle it out at the minor resistance of $48.10. If bulls clear this, the major test is at the resistance zone from $53-$58. If AVAX can clear this zone, it will be off for a new high.

Avalanche Price Analysis: AVAX/USDT 4 Hour Chart

TradingView Chart

Considering that Avalanche is nearing its mid term trend line, we have to be weary of a potential break below. If bulls fail to provide a bounce on this trend & AVAX breaks to the downside of its falling wedge pattern, we should expect a fall to the major support zone at minimum. Before this can occur, bears must pull AVAX price below the 100MA which has held price up for over a month now. If all these marks get taken out, we should expect $30-$35 to come fairly soon.

While looking at the Stochastic RSI, we can see strength just attempted to break into the overbought region but was quickly rejected. As long as strength can stay above the 50 value, AVAX price is in position to go on to break its falling wedge pattern. The MACD is showing bullish signs as it has formed a bottom curving formation over the last few weeks. Once the MA’s clear the 0 value, AVAX should launch back to its major resistance zone.

AVAX Intraday Analysis
Spot rate: $41.95
Trend: Neutral 
Volatility: High
Support: $41.92
Resistance: $48.10

Avalanche (AVAX)

Avalanche (AVAX) is the new don of the DeFi town, here’s everything about it

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  • The real strength of avalanche is its core infrastructure and its high transaction throughput.
  • Avalanche is making major inroads into the DeFi market and has recently raised $230 million for DeFi innovation.

Amid the recent mania in decentralized finance (DeFi) a number of Ethereum alternatives have come to the surface. We have recently witnessed one such mind-boggling rally in Solana and its journey to the top ten cryptocurrencies by market cap.

However, we will be talking about the new don in DeFi town and it’s none other than Avalanche. AVAX, the native token of Avalanche has witnessed a solid rally recently. Over the last two months since mid-July 2021, the AVAX token price has surged all the way from under $10 to now above $70.

Meaning, AVAX has delivered a solid 7x or 600 percent returns in the last 60 days. As of press time, AVAX is trading at $71.12 and has a market cap of $15.5 billion. This also makes it the 11th largest cryptocurrency by market cap. Last week itself, AVAX touched an all-time high of $79.

Just like Solana, Avalanche is also among the layer-one blockchain networks eating into the market share of Ethereum. Just to give a perspective, Ethereum dominated 96 percent of the DeFi total value locked (TVL). Now, with the emergence of these new players, the Ethereum share has dropped to 67 percent of DeFi TVL.

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Before we dive into the major factors driving the growth of Avalanche, let’s take a look at what is Avalanche and know a bit about it.

How Avalanche came to life

Avalanche is just a three-year-old project started in 2018 by Ava Labs and Cornell computer science associate professor Emin Gün Sirer. The blockchain claims to be the fastest blockchain measured by time-to-finality. It also claims to be having the most validators in comparison to other proof-of-stake (PoS) protocols.

Back in 2019, Avalanche secured a fundraise of $18 million and released its AVAX tokens priced at $0.33 each. In the subsequent year, Avalanche auctioned another 24.9 million AVAX tokens through a private sale priced at $0.50. Last year in July 2020, Avalanche raised another $42 million through its public token sale. Finally, just two weeks back, Avalanche had its biggest fundraise of $230 million taking its total amount raised close to $300 million.

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As said, Avalanche is among the few layer-one competitors to the Ethereum blockchain network. The blockchain network boasts a transaction throughput of 4,500 TPS with less than three-second finality. On the other hand, Ethereum can process only 15-30 transactions every second with a 1-minute long finality.

Furthermore, the transaction costs on Avalanche are very less in comparison to those on Ethereum. As of date, Avalanche hosts more than 320 decentralized applications (DApps) to the platform. Some of the popular projects like chainlink, Sushiswap, Circle, and The Graph use the smart contracts infrastructure on Avalanche.

Besides, Avalanche has started attracting projects in the emerging NFT space. Popular sports-themed trading card company Topps minted its Major League Basketball NFT Collection on Avalanche, dubbed “Inception”.

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The Avalanche core infrastructure

The major strength of the Avalanche blockchain is its core infrastructure that aims at providing higher decentralization. The core Avalanche blockchain comprises three other integrated blockchains:

  1. The Exchange Chain (X-Chain): This is primarily related to creating and exchanging assets.
  2. Platform Chain (P-Chain): This looks after coordinating with the validators and creating subnets.
  3. The Contract Chain (C-Chain): This looks after executing Ethereum Virtual Machine contracts. A large number of transactions happen in the C-Chain since Ethereum developers can easily build Ethereum-compatible applications using this blockchain.

The Avalanche main network secures and validates all these three blockchains. Avalanche calls the main network as a subnet wherein a “dynamic set of validators working together to achieve consensus on the state of a set of blockchains”. Users can participate in securing the Avalanche network by staking 2000 AVAx tokens currently valued at $142,000.

The subnet also facilitates certain niche use cases that are highly customizable. This can be thus useful to businesses and governments. Besides, the avalanche blockchain architecture also supports private subnets. Thus, anyone who wants to deploy private blockchains can do so.

Expanding Its scope In DeFi

To get broader market acceptability, Avalanche has initiated some key measures. One such is establishing the cross-chain Ethereum bridge. This allows users to seamlessly transfer ERC-20 and ERC-721 tokens between avalanche and Ethereum.

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The bridge will facilitate easy migration of Ethereum’s Defi infrastructure to Avalanche. Thus, users will be able to create faster and cheaper transactions as a result. One of the early beneficiaries of the Avalanche-Ethereum bridge is the DeFi player and decentralized exchange (DEX) Pangolin. This DEX allows trading of all tokens issued on avalanche and Ethereum.

The Ethereum-bridge also allows Avalanche users to circumvent the high transaction times in swapping assets. So far, using the avalanche-Ethereum bridge, a total of $1.72 billion worth of assets have been transferred. Apart from Pangolin, other DApps such as Union, Prosper, bZx, JellySwap, and others have joined the Avalanche ecosystem.

Currently, Avalanche is working on bringing two leading DApps on Ethereum to its native blockchain platform. Last month, the blockchain introduced a $180-million Liquidity mining incentive program Avalanche Rush to its platform. This program has been partially distributed to Aave and Curve Finance.

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In the initial phase, AVAX will provide liquidity incentives to Curve and Aave users. The Avalanche Foundation has already set aside $27 million worth of AVAX to fund this program.

The Avalanche (AVAX) price rally

Some of the key developments happening on the Avalanche blockchain. have been the reasons behind the recent rally in the AVAX tokens. The launch of Avalanche Rush has been one of the key reasons behind this AVAX rally. Besides, the Avalanche Foundation has raised another $230 million to accelerate DeFi innovation on the platform.

There’s a growing investor optimism surrounding upcoming initial DEX offerings (IDO) dubbed AvaXLauncher. This will serve as the new launchpad and incubator of the Avalanche ecosystem. The two major upcoming IDOs on Avalanche are Oracle and Gaming Project: Breed, Play and Earn.

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With the launch of these projects, stakers and holders of AvaXlauncher (AVXL) tokens will receive a small portion of these IDOs through airdrop.

All such development put Avalanche at the forefront of the emerging DeFi space. It won’t be a surprise to AVAX in the top ten list anytime soon.

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Avalanche (AVAX)

Avalanche Price Analysis: AVAX Defending the $70 support strongly

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  • Avalanche price analysis indicates bullishness
  • AVAX/USD retested a previous high today.
  • AVAX eyes new all-time high in days to come

Today’s Avalanche price analysis is bullish as the market has advanced strongly in the last 24 hours and is now close to the prior swing high of $73. We anticipate further gains later today, and a new high, as long as AVAX/USD can maintain its momentum.

Over the past 24 hours, the market has swung mostly in the red. Bitcoin fell 0.33% and Ethereum rose 3.39%, while Avalanche (AVAX) was the best performer, increasing by more than 20%.

Avalanche price movement in the last 24 hours: Avalanche rally eyes $70 range

The price of AVX/USD has been trading in a range of $52.01 to $65.14 for the last 24 hours, suggesting considerable volatility over the period. The total trade volume has increased by 115.54 percent and is now at $2.13 billion, while the overall market capitalization is about $14.12 billion

AVAX/USD 4-hour chart: AVAX set to break $65?

On the 4-hour chart, we can observe the Avalanche price action attempting to break past swing high of $65.

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Avalanche Price Analysis
AVAX/USD 4-hour chart. Source: TradingView

In light of this, the price action for the Bitcoin rate has seen a resurgence of bullish momentum in recent days. After declining by more than 30 percent on September 7th, a new lower low was established at $33.

AVAX, on the other hand, accelerated throughout the following week, with a new peak of $65 and a nearly 100 percent increase. Following that, there was a retest of the previous resistance as support at $50.

The previous swing high of $65 was re-established over the previous several days. After a few-day consolidation, a higher low was established there. The price of the Avalanche began to rise again late yesterday, resulting in the prior swing high of $65 in recent hours.

Avalanche Price Analysis: Conclusion 

For today, the price analysis for the Avalanche is bullish, with prices rising significantly from yesterday’s $65 previous swing high. As a result, if AVAX/USD can maintain its momentum, we anticipate even more upside overnight and a new high set next.

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As you wait for Avalanche to continue rallying, read our pieces on Wrapped Bitcoin and NFT Marketplace.

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Avalanche (AVAX)

Emin Gun Sirer Avalanche (AVAX) Comments on Chinese Real Estate Developers and Crypto Markets

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Emin Gun Sirer expressed: “Is this the day when the crypto markets realize that they are far more resilient to Chinese real estate developers than they think they are?”

Community response:  No, because if there will be a collapse for Evergrande, it will affect all economies in the world included crypto era.

Some say the opposite that it will not have a global effect and that even Communist government wants it to collapse to be able to shift the money from construction to semiconductors and other tech fields.

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In the long term, the Chinese government seems to be happy with the macroeconomic consequence of the controlled demolition of Evergrande for a few reasons. 1. It helps to free the liquidity from the real-estate black hole to be channeled into more productive industries such as semiconductors, biotech etc. 2. Debt-to-equity/ownership conversion goes along with the overall trend of nationalizing high-quality assets in China. 3. It seems to accomplish the geopolitical goal of not rewarding Australia with higher iron prices.

As a result, the likelihood of an Evergrande rescue is currently <2%. Restructuring, and a partial nationalization over a 2-3 year time-frame is probably the path of least resistance. And, the contagion effect to the US market is likely to be minimum.

Practically, after the short-term emotional sell-off is over, US equity market is probably going back to whatever track it was on before the Evergrande default.

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Many of the upper management of Evergrande somehow managed to pull off early-redemption of their own shares of these high-yield products. And now Evergrande pretends to get some change back from these folks.

Protestors are probably very busy right now, trying to figure out the actual value of these “in-kind” properties as repayment before the Oct 1st holiday, and the most newsworthy part of the crisis may take a break next week.

To put this into context, the APR of these wealth-management products vary between 14%-25% on their original term sheet. And, many of those “in-kind” properties are located in some relatively remote part of China (i.e. 4-5th tier cities).

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It will now repay these debtors (40Bn RMB) over 10 quarters @ 0% APR, or in-kind using condos/retail-space/parking-space that are still under construction (30-50% chance that they may never finish), or to offset future payments debtors may owe to Evergrande.

The default on these wealth-management product (40Bn RMB) is no small matter, but the bigger issue is the 2Tr RMB liability of the entire company. Right now, Evergrande consider this crisis as a liquidity crisis, i.e. its asset value > its liability

The protests have been disproportionally over-covered by the media, because most of the holds of these now toxic assets are friends & families of the current employees of Evergrande. i.e. people with some insider knowledge on how to make the company look bad.

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The Evergrande incident did shake the crypto space a bit, but as Emin says, crypto markets would prove their resilience.

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