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 that amount burned on February 24 alone.
AVAX Burn Rate Escalation
The specified increase came after days of stability where the daily burn rate ranged between 1,000-1,300. As a result, more than half of all tokens burned in the last 30 days occurred last week. According to data from the Avalanche explorer, the increase 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 situation could mean that the higher the network activity, the higher the fees, and consequently, the higher the amount of AVAX to be burned. Generally, the burning activity can be interpreted as a bullish event due to the supply constriction it introduces. 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 Uptrend
During the same period, AVAX’s long/short ratio did not exceed 1, which could indicate a dominance of bearish leveraged investors. Experts believe 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 uptrend for AVAX in the coming days.
The Moving Average Convergence Divergence (MACD) line was below the signal line, which could indicate a pullback. However, experts believe a bullish crossover seems plausible 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.
