Avalanche‘s (AVAX) burn rate showed a sharp increase over the past week, accelerating the rate at which tokens are removed from circulation. According to an analysis of Avascan data, about 31,650 AVAX tokens were burned in the last seven days, with more than half of this amount burned on February 24 alone.
AVAX Burn Rate Climbs
The mentioned increase came after a period of stability where the daily burn rate was between 1,000 and 1,300 tokens. As a result, more than half of all tokens burned in the last 30 days occurred last week. Data obtained from Avalanche explorer indicates that the rise in the burn rate followed a similar increase in network transactions. Current data suggests that Avalanche may be burning all revenue from transaction fees.
This situation could mean that the higher the network activity, the higher the fees, and consequently, the higher the amount of AVAX that will be burned. In general, the burning activity can be interpreted as a bullish event due to the supply constriction it brings. However, last week’s increase failed to create upward pressure on AVAX. According to Coinglass data, open interest (OI) in AVAX futures fell by 18% over the last 10 days.
Expectations for an AVAX Price Increase
During the same period, AVAX’s long/short ratio did not exceed 1, which could indicate a dominance of bearish leveraged investors. Experts suggest that examining AVAX’s daily chart provides interesting insights into its next moves. The Relative Strength Index (RSI), tested the neutral 50 level as resistance and retreated. Successfully overcoming this level could indicate an upward trend for AVAX in the coming days.
The Moving Average Convergence Divergence (MACD) line was below the signal line, indicating a potential pullback. However, experts believe that a bullish crossover seems plausible, which could be followed by a continuation of the AVAX uptrend. According to the website 21milyon.com, the ninth-largest cryptocurrency experienced a loss of 8.46% last week at the time of writing. The price drop of AVAX has affected speculative interest in the token.
