- Avalanche Foundation is pursuing a $1 billion fundraising plan to establish two U.S.-based treasury companies.
- Open interest tied to AVAX futures doubled in three weeks, reflecting increasing speculative force in the market.
- A cup and handle pattern drives the major accumulation trend in Avalanche price.
On Monday, September 22nd, the crypto market witnessed a sudden sell-off, which pushed the pioneer cryptocurrency below $113,000. A majority of major altcoins, including AVAX, followed similar momentum and showed a sharp decline. However, the Avalanche price shows strong resilience and bounced from the intraday low of $29.4 to currently trade at $31.35. The buying pressure can be attributed to multiple factors, including corporate adoption, ETF speculation, and increasing investor interest in the asset’s future contracts. Will AVAX reclaim the $35 mark?
AVAX Gains Momentum Amid Foundation Fundraising and ETF Filings
Over the past three weeks, the Avalanche price rallied from $22.67 to the current trading value of $35.81, registering a 50% gain. The rally was accompanied by overall market optimism amid the investors’ anticipation of a Federal Reserve rate cut. The trading volume during this surge was rising, indicating increasing involvement of traders in the upward movement.
Two big initiatives of the Avalanche Foundation provided impetus. The first one includes a private investment worth $500 million by Hivemind Capital in a company that is listed on Nasdaq, with Anthony Scaramucci as advisor. The second one is a $500 million SPAC investment with Dragonfly Capital. The funds from both deals will purchase AVAX tokens by the foundation at a discounted rate, which will contribute to tightening the market supply.
The regulatory dynamics also projected additional momentum onto Avalanche (AVAX) sentiment. A new SEC approval of generic listing requirements of commodity-based trusts allows listed commodity products to be listed without a separate review by the SEC, provided that the product satisfies specified listing requirements. This shift speeds up the trajectory of spot AVAX ETFs.
In line with this move, Bitwise registered a spot AVAX ETF as an S-1 registration statement on September 15th, joining the list of prior registration statements submitted by VanEck and Grayscale.
Along with the price jump, the future contract tied to AVAX recorded a massive increase as open interest surged from $900 million to $1.82 billion in the last three weeks. This growth of 102% suggests increased speculative interest and confidence in the market.
These factors, such as foundation fundraising, regulatory changes, ETF disclosure, and the expansion of futures, culminated in this market activity.
AVAX Token to Witness Last Pullback Before Major Breakout
Since last weekend, the crypto market has witnessed a slowdown in recovery momentum as the 0.25% Fed rate cut failed to drive the expected market recovery. Following the momentum, the Avalanche price reverted from $35.8 to $32.6, accounting for a 9.9% loss.
However, this pullback in the AVAX token shows a potential formation of traditional reversal patterns called a cup and handle. The chart setup displays a long accumulation zone in a U-shape, followed by a temporary pullback to recoup exhausted bullish momentum.
If the pattern holds, the altcoin could witness a price drop to nearby support, such as $28.27 and $26.80. The Avalanche price will likely sustain this support to eventually breach the neckline resistance at $36.
A bullish breakout from this resistance will accelerate the bullish momentum and signal a major change in the price trend.
Also Read: US Lawmakers Push to Add Crypto to 401(k) Retirement Plans
