The crypto market correlation and the launch of Valkyrie’s Avalanche fund also helped propel AVAX to a weekly high.
Avalanche (AVAX) has rallied sharply five days after testing a key turning area as support. Now, the AVAX/USD pair is facing the possibility of continuing its move higher in the second quarter.
An advance of more than 30%?
AVAX price rose to almost $69.50 on May 5 from almost $55 on April 30, a jump of 25%.
Curiously, AVAX bounce move appeared within the same support area ($54-60 range) that had preceded a 100% and 175% price rally in the Jan 2022-April 2022 sessions and from October 2021 to November 2021, respectively.
In addition, the lower trend line of AVAX’s prevailing descending channel pattern (possibly a “bull flag”) served as support. That raised the potential for the Avalanche token to extend its bounce move towards the upper trend line of the channel near $90, almost 35% higher than the current price.
Valkyrie Launches AVAX Fund
AVAX’s price rally also coincided with similar bullish moves elsewhere in the crypto market, in part due to the Federal Reserve’s announcement on May 4 to raise interest rates by 0.5% from the widely anticipated 0.75%.
AVAX is up 20% when measured from the May 4 lows near $59. Interestingly, its earnings turned out to be higher than those of its main rival assets, including Bitcoin (BTC), Ethereum (ETH), and Polkadot (DOT). That could be due to Valkyrie.
The Tennessee-based crypto investment firm announced on May 4 that it will launch an Avalanche Trust (VAVAX) for accredited investors. He set the minimum investment at $25,000 and, according to sources, has already attracted $25 million into his vaults.
We’re excited to partner with @avalancheavax to launch the Valkyrie Avalanche Trust today! Gain secure access to $AVAX within the ease of a trust vehicle.
Learn more below pic.twitter.com/UvpnDId0ln
— Valkyrie (@ValkyrieFunds) May 4, 2022
We’re excited to partner with @avalancheavax to launch the Valkyrie Avalanche Trust today! Get secure access to $AVAX with the ease of a trusted vehicle.
Learn more below
The launch comes after Avalanche saw upward trends in key metrics, including usage and revenue generation.
Specifically, the network’s average daily transactions almost doubled in the first quarter of 2022 (+82.8%) compared to the previous quarter, while its total revenue grew by 72.7% in the same periodreports Messari researcher James Trautman.
The analyst further noted that Avalanche’s revenue growth could put “upward pressures” on AVAX’s market value, given that its proof-of-stake network burns 100% of fees (derived from AVAX) and therefore thus reducing the total circulating supply.
“This builds value for all token holders through increased scarcity rather than aggravating validator and delegator balances,” Trautman wrote, adding:
“The question is how statistically significant is the difference between revenue and market value […] Since fundamental value (as opposed to speculative value) becomes a more substantial part of market value, there should theoretically be a strong correlation between earnings and market value.”
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