AVAX Price Prediction 2024: How Avalanche's Token is Set for a Major Surge?

Key points:

• Avalanche (AVAX) experienced a significant 120% price increase from September 2023 to 2024, bolstered by strong on-chain activities, especially in staking.

• Strategic initiatives, including the Avalanche Rush program and expansions into Real-World Assets and GameFi, have significantly propelled AVAX's value and ecosystem growth.

• AVAX shows potential for further growth, aiming for a $50 price point, though it faces challenges in overcoming key resistance levels and market volatility.

Avalanche (AVAX) has been witnessing a notable price surge since October 2023. This article will delve into on-chain data analysis to explore the pivotal factors influencing AVAX's price movements over the past month. Additionally, we'll highlight significant resistance levels to monitor in the coming days.

The beginning of January saw Avalanche's recovery efforts losing momentum with its price peaking at $43.44 on January 2nd, then later followed by a decline. This trend suggests that bearish investors are capitalizing on any slight increase in value. On January 3rd, the selling pressure intensified leading to a drop in the AVAX/USDT below the critical $38 support level. This downturn completed a bearish head-and-shoulders pattern, indicating the onset of a correction phase.

Daily chart for AVAX/USDT. Source: TradingView

Avalanche currently finds robust support at the $31 mark. However, if this support level fails to hold, there's a potential for the pair to fall toward the $26 target, as indicated by the pattern. Contrarily, a shift back above the $44 threshold in the near term could negate this bearish outlook.

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• Avalanche Crypto Gains Despite Market Dip

• On January 3rd, 2024, the cryptocurrency market experienced a broader downturn, causing the price of Avalanche (AVAX) to fall by 10%. This decline was influenced by market speculations about a possible rejection of a Bitcoin (BTC) Spot ETF, which contributed to a $109 billion loss in the global crypto market's value in a hectic 12-hour period. However, following a stabilization near the $37 mark, significant on-chain data suggests a different trend among Avalanche investors. Instead of a sell-off frenzy, there appears to be a growing confidence in a swift market recovery. 

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• Data shows an increase in AVAX staking coinciding with the price drop. As of January 1, 258.52 million AVAX was committed to staking through smart contracts and validator nodes, but by January 5, this amount had increased to 266.59 million AVAX, indicating that investors committed an additional 7.05 million AVAX to their stakes within three trading days. Despite the market decline, this trend suggests strong investor commitment, with a total of $260.85 million in AVAX staked during this period.

$266 million staked in AVAX, source: StakingRewards

• From September 2023 to January 2024, Avalanche (AVAX) maintained its impressive rally. In this period, the altcoin's price skyrocketed by 120%, climbing from $16 to $41. Notably, Avalanche's bullish trend has persisted, even as other major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) faced declines ahead of the US Federal Reserve's rate decision in December.

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• This surge brought its weekly closing price above the $20.65 resistance level for the first time since the previous year. It broke a barrier that had restrained AVAX's bullish momentum and led to a significant correction. Recent developments have rekindled optimism among AVAX holders, triggering a rapid 70% rally back to the $35 range, the midpoint of the 94% bear market rally between November 2021 and September 2023. Following this trend, AVAX's price has continued to rise, setting a weekly resistance at $35.54. The current rally has pushed past this level, reaching the significant $40 mark, potentially indicating a 100% rebound.

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• What is AVAX (Avalanche)?

• Avalanche is a blockchain-based platform equipped with features for launching decentralized finance (DeFi) applications. It provides a comprehensive set of tools for the creation and management of financial assets which facilitate the development of scalable financial solutions. This open-source, decentralized system relies on smart contracts and is notable for being the first to achieve transaction finalization in under a second. Avalanche is compatible with the full range of tools used in the Ethereum network and boasts an impressive number of block-producing nodes in its test environment. Its capacity to handle over 4,500 transactions per second positions it among the fastest blockchains available.

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• The platform empowers users and organizations to craft their own financial assets and customized DeFi applications for a variety of purposes, including both public and private blockchain networks. It enables the creation of bespoke blockchain networks with user-defined governance rules. Avalanche fosters an interoperable environment to allow easy interaction across various networks and applications built on its framework.

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• At the heart of the Avalanche ecosystem is its native token, AVAX, which plays a critical role in its governance structure. AVAX is utilized for staking and voting purposes and serves as the primary transactional currency on the network. Users also have the option to pay network fees using AVAX. If you would like to learn more about AVAX, please refer to our research available here.

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Avalanche Boosts DeFi: Surge in AVAX Value and Ecosystem Growth

• In the public blockchain domain, major projects have made significant advancements over the past month, ranging from the Ether ecosystem's deflationary transition to the enhanced Solana system. This also includes Avalanche and Fantom, both of which have launched substantial ecological incentive programs. These projects have not only progressed in their development but have also experienced surges in their prices within the secondary market.

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• Avalanche's public blockchain project has been remarkably successful, particularly following the announcement of the Avalanche Rush program in 2021. This $180 million liquidity mining incentive initiative has significantly boosted AVAX, Avalanche's protocol token. Starting from approximately $23, AVAX's value skyrocketed to a high of $57.6, marking a notable 150% increase. Even more impressive is the growth in Total Value Locked (TVL) within the Avalanche ecosystem. Data from Fomocraft shows that in September 2021, Avalanche's TVL surged by an extraordinary 1066%, outpacing the growth rates of Solana and Fantom, which also have substantial liquidity incentive programs.

AVAX TVL growth in 2021 August, Source: Fomocraft Ventures

• The introduction of the Avalanche Rush program reflects the Avalanche Foundation's dedication to expanding its DeFi ecosystem. This program aims to bring major DeFi protocols like Aave and Curve onto the Avalanche platform. This initiative underscores the Avalanche Foundation's commitment to scaling DeFi and fostering a more accessible, decentralized, and cost-efficient ecosystem. The Foundation also launched a $3M liquidity mining program with BENQi, a protocol native to Avalanche. Additionally, Stake DAO has partnered with Avalanche for a staking collaboration in order to develop new yield-generating strategies in anticipation of Aave and Curve's deployment on Avalanche. The Avalanche Rush program complements the launch of the Avalanche Bridge (AB), a cutting-edge cross-chain bridge technology enhancing asset transfer between blockchains. Together, Avalanche Rush and the new bridge are set to provide robust liquidity incentives and a seamless experience for both established and emerging DeFi applications joining the Avalanche ecosystem.

• Explore the Reasons of the Recent Avalanche Price Increase

• The recent surge in Avalanche's (AVAX) price is a consequence of its strategic focus on two key blockchain areas: real-world assets (RWAs) and GameFi, particularly noticeable in the run-up to 2024. This emphasis has led to significant partnerships with traditional finance (TradFi) heavyweights like JPMorgan Chase and CitiBank, aiming to utilize Avalanche's blockchain subnets for developing RWA projects. Besides, the Avalanche Foundation has established Avalanche Vista, a $50 million fund committed to RWA research and development.

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• The attention to RWAs by Avalanche is well-timed, especially considering Bernstein, a notable private wealth management firm, forecasts $3 trillion in assets to be tokenized in the next five years. This prediction aligns with the recent investor interest in AVAX, as they anticipate gains from the burgeoning RWA sector. This interest is reflected in the significant growth of the total value locked (TVL) in the Avalanche ecosystem, which surged from $528.02 million in October 2023 to $1.006 billion by December 24, 2023. However, the TVL has since adjusted to $867.83 million till January 5, 2024.

AVAX’s TVL, source: DeFiLlama

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• Moreover, Avalanche has established itself as a leader in the GameFi industry. Its unique subnet architecture offers game developers the flexibility to create scalable and custom blockchains, attracting prominent gaming studios to the Avalanche platform. With the global gaming market projected to reach $1.4 trillion by 2030, Avalanche's technology stands out as a crucial advantage.

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• The resurgence in GameFi has played a pivotal role in the widespread adoption and increased fee burns of AVAX. In the past 10 days alone, AVAX's price has soared by 75%, ranking it as the second-best performing mega-cap altcoin, just behind Solana (SOL). This rise isn't solely due to the broader altcoin market rally; on-chain data indicates that the fundamental drivers are the newly launched GameFi subnets. Hitesh Malviya, a crypto analyst, highlighted that these subnets are significantly boosting AVAX adoption. He explained that gaming subnets like DFK and DEXALOT are processing more transactions than the Avalanche  Chain, leading to an uptick in tokens burned as gas fees.

Predict the Future of AVAX: Is $50 Price Possible?

• The future of Avalanche (AVAX) reaching a price of $50 seems increasingly possible when analyzing both on-chain indicators and technical analysis perspectives. Key on-chain metrics, such as growing network usage and a rising Total Value Locked (TVL), indicate a potential upsurge in AVAX's value. This upward trend is further bolstered by the expected emergence of Real-World Assets (RWA) and GameFi sectors as leading blockchain investment narratives in 2024.

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• To sustain this bullish momentum, AVAX must first overcome the initial resistance at $40. The data shows that the $40 mark is a substantial barrier. Investors in Avalanche have bought 7.05 million AVAX, valued at approximately $260.85 million, this week as a tactical response to the worldwide pullback in the cryptocurrency market. If these holders decide to sell at their break-even point, AVAX might struggle to surpass the $40 threshold. However, a decisive breakout above this range could propel the momentum needed to reach and potentially exceed the $50 target in the coming weeks.

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• However, potential hurdles exist. For instance, the $45 mark could present a significant resistance zone, a remnant impact of the TerraUST crash in May 2022, which created a critical red candle at that price range. On the on-chain front, a notable reduction in Avalanche's market supply, driven by a surge in staking activities, has helped defend the crucial $35 support level. With the staking balance continuing to rise, AVAX may appear poised for a bullish reversal.

Conclusion

• Avalanche (AVAX) has demonstrated a remarkable price surge from September 2023 to January 2024 with a notable 120% increase in its value. Despite the broader cryptocurrency market downturn and challenges at critical price points, AVAX still shows resilience. This resilience is largely fueled by significant on-chain activities such as increased staking, particularly during market dips, and robust investor commitment. Avalanche's strategic focus on expanding its DeFi ecosystem has been pivotal in its growth. These efforts have not only enhanced AVAX's price but also its Total Value Locked, attracting partnerships with traditional finance entities and leading to increased adoption in the GameFi sector.

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• Looking ahead, the potential of AVAX to reach a $50 price point seems increasingly plausible, contingent upon overcoming key resistance levels and maintaining the bullish momentum driven by on-chain indicators and technological advancements. However, investors should remain cognizant of potential market dynamics and resistance zones that could impact AVAX's trajectory. As the Avalanche ecosystem continues to evolve and expand, its role in the blockchain and DeFi sectors appears poised for further growth and significance.

• FAQ

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• Q: What Are the Price Predictions for Avalanche in 2024?

• A: Price predictions for Avalanche (AVAX) in 2024 are optimistic with potential for further growth aiming for a $50 price point. Overcoming key resistance levels and market volatility remains a challenge.

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• Q: What Are the Available Platforms for Purchasing Avalanche (AVAX)?

• A: Avalanche (AVAX) can be purchased on various cryptocurrency exchanges like FameEX, Coinbase or Binance. These platforms offer the option to buy, sell, and trade AVAX, often requiring users to set up an account and go through a verification process.

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• Q: What Is the Highest Value Ever Reached by Avalanche (AVAX) to Date?

• A: The significant price movements, such as the surge from $1.32 to a peak of $149.6 during the entire project launch, have remained at $36.79 as of January 5, 2024. To find the absolute highest value, one would need to refer to historical price data on a financial or cryptocurrency market analysis platform.

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• The information on this website is for general information only. It should not be taken as constituting professional advice from FameEX.