Avalanche Price Surges 36% as Grayscale Announces AVAX Trust

Avalanche price broke above $26.60 on August 23, gaining 35.9% over the past week. Market indicators suggest this rally is driven by investor excitement following Grayscale’s recent announcement.

AVAX Reclaims $25 after Grayscale Announcement

On August 22, Grayscale Investments introduced the “Grayscale Avalanche Trust,” allowing investors to gain direct exposure to the Avalanche ecosystem.

Further emphasizing the growing institutional interest in Avalanche, Franklin Templeton also announced the decision to include AVAX in its Franklin On-chain U.S. Government Money Fund.

These announcements sparked a surge in Avalanche price, which had been consolidating around $19.87, pushing it past the $25 mark.

In the days leading up to the announcement, Avalanche price steadily climbed, reflecting growing market confidence. From August 16 to August 22, Avalanche price rose by 7.06 points, or 35.9%, reaching $26.22. The rally was further fueled by the Grayscale news, signaling a significant market shift that may continue in the near term.

AVAX Open Interest Surges $61M Amid 36% Rally

Following the price surge, Avalanche traders appear convinced the rally will be sustained. Derivatives market trends show increased activity and liquidity, as evidenced by the sharp rise in Open Interest.

Open Interest is a crucial metric for price projections, as it tracks the total number of outstanding derivative contracts in the market.

Between August 16 and August 23, Open Interest in AVAX futures surged from $201.86 million to $261.55 million. This 30% increase in Open Interest aligns closely with the 35.9% rise in Avalanche price during the same period, reflecting heightened market engagement.

Notably, the Avalanche price increased faster than Open Interest, suggesting the rally is driven more by actual AVAX spot purchases rather than mere speculative activity.

This could provide Avalanche price with stronger support, reducing the likelihood of sharp retracements. If demand continues to rise, Avalanche price may see further upward movement.

Historically, when Open Interest and price increase in tandem, it often signals a sustained trend. Given the current market dynamics and historical patterns, there are strong indications that the Avalanche price could rally further in the coming days. Additionally, the ongoing institutional interest in Avalanche, coupled with positive market sentiment, could drive 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 indicates strong momentum, setting up the next target at $30. Second, the narrowing of the Keltner Channels suggests reduced volatility, supporting a steady uptrend.

If Avalanche’s price can maintain support above $25.87, it is likely to test the $30 resistance in the coming days. On the downside, key support lies at $22.87, where a breach could lead to a short-term pullback. However, given the bullish momentum and growing investor interest, the odds favor a continued uptrend toward $30, with strong support at current levels providing a solid foundation.