Avalanche (AVAX) has demonstrated some strength in the cryptocurrency market, posting an 8% gain. The upward trajectory for AVAX began three days ago when selling pressure began to ease, signaling what appeared to be the start of a price retracement.
Since then, the asset has closed in the green for three consecutive days, with yesterday marking a milestone as AVAX broke through a critical resistance level at $28.6. This breakthrough has likely bolstered investor confidence, potentially encouraging further buying at this new support level.
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Challenges Ahead: The Major Hurdle
Despite the positive momentum, AVAX still faces a considerable challenge. Since mid-March, the price action has been predominantly bearish, consistently encountering resistance at a descending trendline.
For AVAX to truly shift into a bullish phase, it must overcome this trendline resistance, which currently stands as the major hurdle ahead. Should this resistance persist, the current price movement may prove to be merely a retracement within a larger bearish trend.
Ecosystem Developments and Market Sentiment
Industry observers have noted that Avalanche’s recent performance may be attributed to more than just technical factors. Crypto analyst Beastlorion (@Beastlyorion) shared insights on X.
Based on the post, a key factor potentially driving AVAX’s price increase is Avalanche’s recent strategic moves in the blockchain space. The platform has been securing significant partnerships and deals, particularly in the Layer 1 (L1) blockchain sector. These collaborations are expected to dramatically increase Avalanche’s network usage and adoption.
The growth of Avalanche aligns with Metcalfe’s law. This law says that the value of a network is related to the number of people using it. As more people join Avalanche through these new partnerships, the network’s overall value and usefulness may grow rapidly.
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Ethereum ETF Anticipation
Another factor potentially influencing AVAX’s price movement is the anticipated resumption of Ethereum ETF trading. With several ETFs expected to launch in July, progress on amending offering documents has reached the final stages, with only minor issues left to address before approval.
Avalanche is part of the broader Ethereum ecosystem, and some investors may be accumulating AVAX in anticipation of a potential price surge across Ethereum-related assets.
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