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Avalanche (AVAX) is making strides into the traditional finance sector; ParaFi Capital plans to tokenize a portion of its $1.2 billion assets on the blockchain. This development aligns with AVAX’s growing momentum, indicating potential for higher price movements.
Technical Analysis Signals Positivity for AVAX
AVAX is currently consolidating within a descending wedge formation on the daily chart. Analysts believe that surpassing the $28 mark could propel the price to $50, representing a gain of over 104%.
If the $28 level is not breached, it is possible for the price to retreat to lower support levels. The weekly chart indicates that the second corrective wave and the rising flag formation have completed, with expectations for a third upward wave reaching the 0.618 to 0.786 Fibonacci regions.
On-Chain Metrics and Ownership Distribution
On-chain metrics also support a favorable outlook for Avalanche. The amount of staked AVAX has increased by 6%, total value locked (TVL) in DeFi has risen by 11%, and stablecoins on the Avalanche blockchain have seen a 13% uptick. These factors reflect growing confidence in the network.
Additionally, historical ownership density shows minimal changes; retail ownership increased by 4.38%, while investor ownership rose by 12%. Although whale ownership experienced a slight decline of 6%, the overall trend points upward, supported by significant price movements.
Investor Behavior and RSI Indicators
Analysis based on the holding duration of Avalanche tokens shows a 5% increase among long-term holders. There is a minor decline in those holding for one to twelve months. Day traders remain active, but they hold AVAX for shorter periods, contributing to on-chain activity.
The RSI is at 59, indicating neutrality, while the stochastic RSI is at 81, marking overbought conditions. An overbought signal does not always indicate a reversal; if other indicators do not signal a decline, it could suggest bullish momentum. This situation is viewed positively by traders, signaling potential price increases for AVAX.
With these positive signals, AVAX appears poised for a price increase. Rising staking rates, increasing TVL, and investor confidence support an upward trend. Analysts suggest that surpassing resistance levels could lead to significant gains for AVAX.
