James Richardson
The price of Avalanche (AVAX) has seen a significant 10% increase in the wake of a recent announcement from the Avalanche Foundation. The foundation revealed plans for a repurchase agreement with the Luna Foundation Guard (LFG), the entity connected to the Terra blockchain, to buy back all Avalanche tokens sold in 2022. This surge has brought the AVAX price close to $30, boosting its market capitalization to over $11.5 billion.
The Avalanche Foundation confirmed that they are in the process of repurchasing the Avalanche tokens that were sold to the Luna Foundation Guard in April 2022. However, the agreement is still awaiting approval from the Bankruptcy Court. This news has generated strong bullish momentum, as investors are eager to accumulate AVAX tokens before the deal is finalized.
Before LFG’s bankruptcy in 2022, it held a total of 1.97 million AVAX tokens, valued at approximately $60 million. LFG initially acquired these tokens to strengthen its UST stablecoin reserves. The Avalanche Foundation’s decision to repurchase these tokens will prevent LFG from violating the original agreement, protecting the tokens from the complexities of bankruptcy liquidation. Earlier in 2023, LFG began moving its tokens after a settlement between Terraform Labs and the U.S. SEC.
Once the transaction is completed, Avalanche will reclaim 1.97 million AVAX tokens, further strengthening the foundation’s ability to promote growth and development within its ecosystem.
Will the AVAX Price Rally Continue?
The planned repurchase of 1.97 million AVAX tokens has created a strong bullish catalyst, increasing investor confidence. By reducing the circulating supply of AVAX, the repurchase is likely to exert upward pressure on the token’s price.
At the time of writing, AVAX is trading at $28.49, marking a 9.33% increase. From a technical perspective, the AVAX price is showing signs of breaking out of a falling wedge pattern that has been forming for months. Indicators such as the Relative Strength Index (RSI) at 49.8 and a positive Moving Average Convergence Divergence (MACD) of 0.19 point toward continued bullish momentum.
Cryptocurrency analysts, including ‘Crypto Winkle,’ suggest that if bulls can push AVAX beyond the key $30 resistance level, the price could rally further. Some market predictions even indicate a potential rise to $50 in the near future.
Additionally, Avalanche is becoming an increasingly popular platform for traditional financial institutions. Recently, Colombian neobank Littio transitioned from Ethereum to Avalanche to launch its products, further solidifying Avalanche’s growing influence in the market.
