Avalanche boosts growth prospects: Will it influence AVAX’s price action

• Avalanche ushers in its first institutional subnet, potentially paving the way for more liquidity.
• AVAX shows signs of weakness as the market waits for another directional price shock.

Institutional adoption is no doubt one of the most important catalysts in the crypto and blockchain segment. This was evident in 2021 by the robust adoption that poured in, albeit short-lived. Avalanche [AVAX] is reviving the hope of mass adoption after onboarding Intain.

Read Avalanche’s [AVAX] Price Prediction 2023-24

Avalanche recently announced that it will host Intain as the first institutional subnet. It is an important development for Avalanche, as it marks an important milestone for the network in terms of institutional demand. This may encourage more institutions to embrace Avalanche.

The first institutional Subnet is here!

.@IntainFT, a structured finance platform that facilitates administration of $5.5B in assets, is launching IntainMARKETS, an on-chain marketplace for tokenized asset-backed securities.

Let’s take a look at why Intain #ChoseAvalanche /🧵 pic.twitter.com/yFGqLIasD1

— Avalanche 🔺 (@avalancheavax) January 31, 2023

The other major reason why the new institutional subnet is important is because of Intain’s potential. It is a structured finance platform that mainly deals with debt capital markets. This means it has the potential to facilitate the flow of large amounts of liquidity within the Avalanche ecosystem.

A shortage of short-term reactions

More blockchain networks, especially layer 1s, were prioritizing crypto projects that can deliver immense value. But what does this mean for Avalanche’s future? Perhaps it might contribute to robust organic growth and potentially influence AVAX’s demand.

AVAX’s price at press time already represented a 12% drop from its current four-week high. There was no sign of strong incoming buying pressure in the last 24 hours, hence the announcement about the institutional subnet did not trigger a sentiment shift.

Source: TradingView

AVAX’s metrics suggest…

AVAX’s bearish price outcome reflected the uncertainty around the FOMC meeting. It also reflected the end of the bullish wave in January, especially in the first two weeks. The price volatility metric confirms this, indicating a slowdown volatility as more traders watch on the sidelines, waiting for clear directions.

Source: Santiment

Also, development activity slowed down in the last few days towards the end of January. This added to the list of factors that were influencing market sentiment. Moreover, the weighted sentiment metric tanked between 27 – 29 January.

Source: Santiment

Realistic or not, here’s Avalanche market cap in BTC’s terms

The drop in weighed sentiment was accompanied by a drop in market cap by slightly over $547 million. However, the weighted sentiment has improved slightly, suggesting that the overall investor sentiment might be headed for a bullish shift.

The market outcome will largely be determined by the FOMC. A favorable rate revision may trigger another bullish move, but the opposite might also be true. Another selloff might push AVAX towards the $17 price level. While another rally may push the price to a new 2023 high in the next few days.