Avalanche’s AVAX Price Rebounds Over 30% Following Recovery from Evergrande-Led Sell-Off
As the cryptocurrency market continues to navigate uncertain waters, one token that has managed to recover from its losses is Avalanche (AVAX). On September 22nd, AVAX/USD exchange rate surged by as much as 12.05% to log an intraday high at $66.08. This recovery comes after a portion of the losses incurred in the beginning of the week due to concerns over potential contagion in China’s housing market.
Recovering from Losses
The AVAX/USD exchange rate had plummeted by 18.18% on Monday, reaching a low of $57.34. This drop mirrored the performance of other major cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), which also fell in sync with global stock bourses.
Avalanche’s Fundamentals Remain Strong
Despite its recovery, it is essential to note that Avalanche’s price had surged to a new record high at $77.37 on Binance just days prior to the decline. This significant increase was attributed to the token’s healthy fundamentals and growth potential.
Raising $250 Million in Funding
Avalanche raised $230 million in an AVAX sales round led by Polychain and Three Arrows Capital. This funding came against the backdrop of Ethereum’s ongoing network issues, including bandwidth congestion and higher transaction fees.
Competing with Ethereum as a Smart Contract Hub
Gustavo De La Torre, Business Development Director at N.exchange, highlighted the growth potential of Avalanche, stating:
"AVAX aims at a new price discovery above $100 in the medium to long term. The growth potential can be supported by the fundamental utility, which presents it as a major competitor to the Ethereum blockchain as a smart contract hub."
Technical Analysis: Rising Wedge Pattern
Despite its recovery, the AVAX/USD rate rally may reach a point of exhaustion as it forms a textbook bearish pattern. The rising wedge structure appears when the price consolidates between upward-sloping support and resistance trendlines that look to converge at a later point.
AVAX Price vs. VORTECS Score
Cointelegraph’s VORTECS Score also flipped bullish ahead of the Avalanche token rally. The VORTECS Score is an algorithmic indicator comparing historical market and social conditions around each coin to those currently observed.
Avalanche’s Funding and Growth Potential
As mentioned earlier, Avalanche raised $230 million in an AVAX sales round led by Polychain and Three Arrows Capital. This funding came against the backdrop of Ethereum’s ongoing network issues, including bandwidth congestion and higher transaction fees.
The Rise of Avalanche as a Smart Contract Hub
Avalanche claims to process over 10,000 transactions per second (TPS), compared to Ethereum’s 13 TPS. With more than 270 projects building atop its public ledger, including Tether, SushiSwap, Chainlink, Circle, and The Graph, Avalanche is positioning itself as a major competitor to the Ethereum blockchain.
Bearish Technicals: Rising Wedge Pattern
Despite its recovery, the AVAX/USD rate rally may reach a point of exhaustion as it forms a textbook bearish pattern. The rising wedge structure appears when the price consolidates between upward-sloping support and resistance trendlines that look to converge at a later point.
Conclusion
The AVAX/USD exchange rate surged by as much as 12.05% on September 22nd, logging an intraday high at $66.08. This recovery comes after a portion of the losses incurred in the beginning of the week due to concerns over potential contagion in China’s housing market.
Recommendations
- Conduct thorough research before making any investment decisions.
- Monitor the cryptocurrency market for further updates and developments.
- Consider diversifying your portfolio to minimize risks.
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