Avalanche price rose above $26.60 on August 23 and is up 35.9% over the past week. Market indicators suggest that this increase is due to investor excitement following Grayscale’s recent announcement.
AVAX demands $25 back after Grayscale announcement
On August 22, Grayscale Investments launched the Grayscale Avalanche Trust, which allows investors to participate directly in the Avalanche ecosystem.
To further highlight the growing institutional interest in Avalanche, Franklin Templeton also announced the decision to include AVAX in its Franklin On-chain US Government Money Fund.
These announcements triggered a surge in Avalanche price, which had been consolidating at around $19.87, and crossed the $25 mark.
In the days leading up to the announcement, Avalanche price rose steadily, reflecting growing market confidence. From August 16 to August 22, Avalanche price rose 7.06 points, or 35.9%, to reach $26.22. The rise was further fueled by the Grayscale news, indicating a significant market shift that could continue in the near future.
AVAX open interest rises by $61 million in 36% rally
Following the price increase, Avalanche traders seem to be convinced that the rally will continue. Trends in the derivatives markets show increased activity and liquidity, as evidenced by the sharp increase in open interest.
Open interest is a crucial metric for price forecasting as it tracks the total number of outstanding derivatives contracts in the market.
Between August 16 and August 23, AVAX futures open interest increased from $201.86 million to $261.55 million. This 30% increase in open interest is closely correlated with the 35.9% increase in Avalanche price during the same period and reflects increased market engagement.
Notably, Avalanche price rose faster than open interest, suggesting that the increase is driven by actual AVAX spot purchases rather than mere speculative activity.
This could provide stronger support to the Avalanche price and reduce the chances of sharp declines. If demand continues to rise, the Avalanche price could continue to rise.
Historically, when open interest and price increase simultaneously, this is often a sign of an ongoing trend. Given the current market dynamics and historical patterns, there are strong indications that the Avalanche price could continue to rise in the coming days. In addition, continued institutional interest in Avalanche combined with positive market sentiment could propel AVAX to new highs.
AVAX price prediction: $30 target in sight
Looking ahead, two technical indicators in the current chart suggest a bullish outlook. First, the break above the $26.60 resistance level suggests strong momentum, which puts the next target at $30. Second, the narrowing of the Keltner channels suggests lower volatility, supporting a steady uptrend.
If Avalanche price can hold the support above $25.87, it is likely to test the $30 resistance in the coming days. On the downside, the key support lies at $22.87, where a break could result in a short-term decline. However, given the bullish momentum and growing investor interest, the chances are good that the uptrend will continue towards $30, with the strong support at the current level providing a solid foundation.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The views expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial loss.
