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Avalanche’s (AVAX) burn rate showed a sharp increase last 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 this amount burned on February 24 alone.
AVAX Burn Rate Climbs
The mentioned increase followed a period of stability where the daily burn rate ranged 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 indicated that the rise in the burn rate followed a similar increase in network transactions. Current data suggests that Avalanche could be burning all the revenue it generates 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. Generally, the burning activity can be interpreted as a bullish event due to the resulting supply constriction. However, the increase last week failed to create upward pressure on AVAX. According to Coinglass data, open interest (OI) in AVAX futures fell by 18% in the last 10 days.
Expectations for an AVAX Price Rise
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 about its next moves. The Relative Strength Index (RSI) tested the neutral 50 level as resistance and retreated. Successfully surpassing this level could indicate an upcoming bullish trend for AVAX in the following days.
The Moving Average Convergence Divergence (MACD) line was below the signal line, which could indicate a pullback. However, experts believe that a bullish crossover seems reasonable and could be followed by a continued uptrend for AVAX. According to the 21milyon.com website, 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.
