Avalanche rebounds 25% in five days as AVAX price tests key level — Big rally ahead?

Published at: May 5, 2022

Avalanche (AVAX) has rebounded strongly five days after testing a key inflection area as its support. Now, the AVAX/USD pair faces the possibility of continuing its upside retracement move further into Q2.

A 30%-plus move ahead?

AVAX's price surged to almost $69.50 on May 5 from nearly $55 on April 30, a 25% jump.

Interestingly, AVAX's rebound move surfaced inside the same support area ($54–$60 range) that had preceded a 100% and a 175% price rally in the January 2022–April 2022 and the October 2021–November 2021 session, respectively.

Additionally, the lower trendline of the AVAX's prevailing descending channel pattern (possibly a "bull flag") served as support. That raised the Avalanche token's potential to extend its rebound move towards the channel's upper trendline near $90, up almost 35% from May 5's price.

Valkyrie launches AVAX fund

AVAX's price rally also coincided with similar upside moves elsewhere in the crypto market, partially due to Federal Reserve's announcement on May 4 to hike interest rates by 0.5% against the widely-anticipated 0.75%.

AVAX is up by about 20% when measured from its May 4's lows near $59. Interestingly, its gains turned out to be higher than its top rivaling assets, including Bitcoin (BTC), Ethereum (ETH) and Polkadot (DOT). That could be due to Valkyrie.

The Tennessee-based crypto investment firm announced on May 4 that it is launching an Avalanche Trust (VAVAX) for accredited investors. It set the minimum investment at $25,000 and, according to sources, has already attracted $25 million to its vaults.

We're excited to partner with @avalancheavax to launch the Valkyrie Avalanche Trust today! Gain secure access to $AVAX within the ease of a trust vehicle.Learn more below pic.twitter.com/UvpnDId0ln

— Valkyrie (@ValkyrieFunds) May 4, 2022

The launch comes after Avalanche saw uptrends in key metrics, including usage and revenue generation.

In detail, the network's average daily transactions nearly doubled in Q1/2022 (+82.8%) compared to the previous quarter, while its total income grew by 72.7% in the same timeframe, reports Messari researcher James Trautman.

The analyst further highlighted that Avalanche's revenue growth could put "upward pressures" on AVAX's market value, given its proof-of-stake network burns 100% of fees (derived in AVAX), and thus lowers the total supply in circulation. 

Related: The birth of ‘Ethereum killers’: Can they take Ethereum’s throne?

"This drives value to all token holders through increased scarcity rather than compounding the balances of validators and delegators," Trautman wrote, adding:

"The question is just how statistically significant the spread between revenue and market value is [...] As fundamental value (as opposed to speculative value) becomes a more substantial part of market value, a strong correlation between revenue and market value should theoretically exist."

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Tags
Markets
Altcoin
Market Analysis
Tech Analysis
Index Funds
Cryptocurrency Investment
Investment Trusts
Avalanche
Related Posts
Avalanche price can double by summer as AVAX's 20% weekly rally rekindles 'bull flag'
A sharp upside retracement in the Avalanche (AVAX) market this week has raised its possibilities to rise by another 100% in Q2. Avalanche chart painting a 'bull flag' The bullish outlook primarily appears in the wake of AVAX's multi-month bull flag setup, which formed after a strong price move higher to over $150, an all-time high in the Avalanche market. In detail, the setup is a downward sloping channel, denoted by two parallel trendlines against the previous trend, with volumes declining to underscore a weakening downtrend. In a perfect scenario, bull flags resolve with a breakout move above their upper …
Markets / March 17, 2022
Axie Infinity sees 'no signs of buyers' as AXS price tumbles 30% in two weeks
Axie Infinity (AXS) price has fallen by nearly 30% two weeks after losing $625 million to a hacking incident involving its play-to-earn gaming platform's underlying blockchain, the Ronin Network. AXS/USD dropped to $46.69 on Monday, its lowest level since March 16, signaling a dampening buying sentiment among traders and investors following the hacking incident. Independent market analyst TJ asserted that there is "no sign of buyers" even with the price entering areas with a history of attracting accumulators. For instance, AXS broke below the demand zone that TJ highlighted as a potential inflection point during the weekend, a move that …
Markets / April 11, 2022
Decred price soars 45% in one day three weeks before a major hard fork
Decred (DCR) prices soared by as much as 45% on April 18 before paring some gains as traders bet on a major hard fork that aims to prevent pump-and-dump schemes by miners. Key Decred network upgrade in three weeks DCR rallied by nearly 45% to over $86 in one day, its highest level in four months. Moreover, the massive upside move accompanied a similarly huge spike in its trading volumes, confirming that most traders backed the intraday bullish momentum. Traders flocked to buying Decred ahead of a key upgrade slated for early May that would reduce the DCR mining reward …
Markets / April 18, 2022
Anchor Protocol rebounds sharply after falling 70% in just two months — what’s next for ANC?
Anchor Protocol (ANC) returned to its bullish form this May after plunging by over 70% in the previous two months. Pullback risks ahead ANC’s price rebounded by a little over 42.50% between May 1 and May 6, reaching $2.26, its highest level in three weeks. Nonetheless, the token experienced a selloff on May 6 and May 7 after ramming into what appears to be a resistance confluence. That consists of a 50-day exponential moving average (50-day EMA; the red wave) and 0.786 Fib line of the Fibonacci retracement graph, drawn from the $1.32-swing low to the $5.82-swing high, as shown …
Markets / May 7, 2022
Avalanche 'bull trap' risks pushing AVAX price down by 30% in February
Avalanche (AVAX) bulls should brace themselves for impact led by a growing divergence between severalkey indicators on the daily-timeframe chart. AVAX price chart paints bearish divergence The daily AVAX chart shows a classic bearish divergence between its price and relative strength index (RSI), a momentum oscillator forming since Jan. 11. In other words, the price of AVAX has been making higher highs since the said date. But, on the other hand, the coin's daily RSI has been forming lower highs. This divergence suggest a slowdown in the momentum of the AVAX/USD pair, which may lead to a price reversal. In …
Markets / Feb. 2, 2023