TLDR
- AVAX burn rate hit its highest level since March, boosting price potential.
- Avalanche’s upcoming Granite upgrade promises faster transactions and biometrics.
- AVAX price could rise 70% after forming a triple bottom pattern on charts.
- Avalanche network’s transaction volume surged by 50%, driving more AVAX burns.
Avalanche (AVAX) is showing signs of a potential rebound after its price sharply declined in recent weeks. Despite a broader market downturn, technical indicators suggest that AVAX could experience a significant jump, with some analysts predicting a rise of up to 70%. This possible rally is fueled by the upcoming Granite upgrade and the increased burn rate of AVAX tokens, both of which are expected to positively impact the cryptocurrency’s value.
Avalanche Price Performance and the Granite Upgrade
Avalanche’s price has struggled recently, dipping from highs near $36 in October to about $16.70 by November 7. However, the upcoming Granite upgrade is expected to play a key role in reversing this trend.
Set for activation on November 19, this upgrade is one of the most significant in the network’s history. The upgrade will introduce new features such as biometric capabilities for secure identity verification and enhanced transaction speeds. These improvements aim to boost the overall performance and user experience of the Avalanche network.
The Granite upgrade will also introduce P-Chain epoched views, which will improve internal communication mechanisms (ICM) within the network. These changes could drive higher efficiency and faster transactions, which are important factors for users and developers. As a result, the upcoming upgrade could provide a positive catalyst for AVAX, helping it to recover some of its lost value in the face of a challenging market.
Rising Burn Rate Contributes to Reduced Inflation
Another key factor supporting Avalanche’s price movement is the rising burn rate of AVAX tokens. Avalanche’s fee-burning mechanism continues to show strong results, with the total amount of AVAX burned in October reaching its highest level since March of the previous year. The network burns a significant portion of the transaction fees, which is aimed at reducing the overall inflation of the token supply. As more AVAX tokens are burned, the circulating supply decreases, which may help improve scarcity and, potentially, the value of the token.
According to data compiled by Nansen, the amount of transaction fees on the Avalanche network has risen dramatically. In the past 30 days, the network recorded over 58 million transactions, a 50% increase in activity. This surge in transaction volume has led to a corresponding rise in the burn rate, making the network less inflationary. The burn mechanism has now seen a total of nearly 5 million AVAX tokens burned since the network’s inception, which is seen as a positive long-term trend for AVAX holders.
Technical Indicators Suggest Rebound for AVAX
The technical outlook for AVAX also points toward a potential rebound. On the daily chart, AVAX has formed a triple bottom pattern, which typically signals a reversal in price trends. This pattern, combined with other technical indicators, suggests that AVAX could see a price increase in the near future.
The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both showing signs of upward momentum, further supporting the possibility of a recovery.
Currently, AVAX is trading well below its 50-day and 200-day moving averages, indicating that bears still have control of the market. However, the formation of the triple bottom and the increasing burn rate provide strong support for a potential rally. If AVAX can break through its neckline resistance at $36, the token could see an increase of up to 60%, based on the technical patterns observed.
Growing Use of Avalanche in Real-World Asset Tokenization
In addition to the upcoming upgrade and increased burn rate, Avalanche continues to make strides in the real-world asset (RWA) tokenization space. Avalanche has handled over $1.2 billion in RWA transactions in the past 30 days, capturing more than 66% of the market in this area. This growing adoption highlights the network’s utility and strength, further boosting the case for a potential price rebound.
Avalanche’s strong performance in RWA tokenization is another factor that could drive demand for AVAX tokens. As more institutions and projects turn to Avalanche for tokenizing assets, the network’s value proposition becomes more compelling. This growth could lead to increased transaction activity, further contributing to the rising burn rate and supporting the long-term price outlook for AVAX.
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