Avalanche rebounds 25% in five days as AVAX price tests key level — Big rally ahead?

Avalanche (AVAX) has rebounded strongly 5 days after testing a key inflection space as its assist. Now, the AVAX/USD pair faces the potential of persevering with its upside retracement transfer additional into Q2.

A 30%-plus transfer forward?

AVAX’s price surged to almost $69.50 on May 5 from nearly $55 on April 30, a 25% jump.

Interestingly, AVAX’s rebound move surfaced inside the same support area ($54–$60 range) that had preceded a 100% and a 175% price rally in the January 2022–April 2022 and the October 2021–November 2021 session, respectively.

AVAX/USD weekly price chart. Source: TradingView

Additionally, the lower trendline of the AVAX’s prevailing descending channel pattern (possibly a “bull flag”) served as support. That raised the Avalanche token’s potential to extend its rebound move towards the channel’s upper trendline near $90, up almost 35% from May 5’s price.

Valkyrie launches AVAX fund

AVAX’s price rally also coincided with similar upside moves elsewhere in the crypto market, partially due to Federal Reserve’s announcement on May 4 to hike interest rates by 0.5% against the widely-anticipated 0.75%.

AVAX is up by about 20% when measured from its May 4’s lows near $59. Interestingly, its gains turned out to be higher than its top rivaling assets, including Bitcoin (BTC), Ethereum (ETH) and Polkadot (DOT). That could be due to Valkyrie.

The Tennessee-based crypto investment firm announced on May 4 that it is launching an Avalanche Trust (VAVAX) for accredited investors. It set the minimum investment at $25,000 and, according to sources, has already attracted $25 million to its vaults.

The launch comes after Avalanche noticed uptrends in key metrics, together with utilization and income technology.

Intimately, the community’s common each day transactions almost doubled in Q1/2022 (+82.8%) in comparison with the earlier quarter, whereas its complete revenue grew by 72.7% in the identical timeframe, reviews Messari researcher James Trautman.

Avalanche community worth and cumulative income throughout Q1. Supply: Messari

The analyst additional highlighted that Avalanche’s income development might put “upward pressures” on AVAX’s market worth, given its proof-of-stake community burns 100% of charges (derived in AVAX), and thus lowers the full provide in circulation. 

Associated: The start of ‘Ethereum killers’: Can they take Ethereum’s throne?

“This drives worth to all token holders by way of elevated shortage somewhat than compounding the balances of validators and delegators,” Trautman wrote, including:

“The query is simply how statistically important the unfold between income and market worth is […] As elementary worth (versus speculative worth) turns into a extra substantial a part of market worth, a powerful correlation between income and market worth ought to theoretically exist.”

The views and opinions expressed listed here are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, you must conduct your personal analysis when making a call.