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 analysis of Avascan data, approximately 31,650 AVAX tokens were burned in the last seven days, with more than half of that amount burned on February 24 alone.
AVAX Burn Rate Acceleration
This increase followed 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 from the Avalanche explorer indicates that the rise in the burn rate followed a similar increase in network transactions. Current data suggests that Avalanche could be burning all revenue from transaction fees.
This could mean that higher network activity leads to higher fees and, consequently, more AVAX being burned. Generally, the burning activity can be interpreted as a bullish event due to the resulting supply constriction. 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 Rise
During the same period, the AVAX long/short ratio did not exceed 1, which could indicate dominance by bearish leveraged investors. Experts believe that examining AVAX’s daily chart provides interesting insights into its next moves. The Relative Strength Index (RSI) tested the neutral level of 50 as resistance and retreated. Successfully overcoming this level could indicate a bullish 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 suggest that a bullish crossover seems plausible, which could be followed by a continued uptrend for AVAX. According to the website 21milyon.com, the ninth-largest cryptocurrency experienced an 8.46% loss last week at the time of writing. The price drop in AVAX affected speculative interest in the token.
