Avalanche (AVAX) is expanding into traditional finance, with ParaFi Capital planning to tokenize a portion of its $1.2 billion assets on the blockchain. This development aligns with AVAX’s growing momentum, as price movements suggest a potential for higher gains.
Technical Analysis Signals a Bullish Outlook for AVAX
On the daily chart, AVAX is consolidating within a falling wedge pattern. Analysts believe that breaking the $28 level could push the price toward $50, representing a potential gain of over 104%.
However, if AVAX fails to break past the $28 resistance, it may retreat to lower support levels. The weekly chart shows the completion of a second correction wave and a rising flag formation. Now, analysts expect a third bullish wave that could reach the 0.618 to 0.786 Fibonacci levels.
On-Chain Metrics and Ownership Distribution
On-chain metrics also support a positive outlook for Avalanche. The amount of staked AVAX has increased by 6%, the total value locked (TVL) in DeFi has risen by 11%, and stablecoins on the Avalanche blockchain have surged by 13%. These factors reflect growing confidence in the network.
Ownership distribution has remained relatively stable, with retail ownership rising by 4.38% and investor ownership increasing by 12%. Although whale ownership saw a minor 6% decline, the overall trend remains bullish, backed by strong price action.
Investor Behavior and RSI Indicator
An analysis of Avalanche token holding periods reveals a 5% increase among long-term holders. There is a slight decrease among those holding for one to twelve months, while daily traders remain active but hold AVAX for shorter periods, contributing to on-chain activity.
The RSI stands at 59, indicating a neutral market, while the stochastic RSI is at 81, suggesting overbought conditions. However, an overbought signal does not always indicate a reversal; if other indicators do not show bearish signs, it could suggest continued bullish momentum. This is viewed as a positive signal by traders anticipating further price increases for AVAX.
With these bullish signals, AVAX appears to be preparing for a price surge. Increased staking, rising TVL, and growing investor confidence all support an upward trend. Analysts suggest that breaking through resistance levels could result in significant gains for AVAX.
