AVAX appears poised to move towards $ 80 in a classic technical pattern after hitting a new high above $ 65 on September 12th.
A bull flag structure occurs when the price rises sharply and turns into a short sideways / downtrend. As a result, bull flags often look like downward sloping channels, represented by two parallel trend lines that capture price action.
In addition, the market volume is drying up with falling prices, which suggests that the downtrend is weakening. Therefore, bull flags typically end after a break in their upper trend line, with price rising to the level of the previous uptrend, i.e. the flagpole.
Looking at the chart, AVAX’s price movement has been generating a bull flag pattern since August 17th.
Daily price chart of AVAX shape Bull flag | Source: TradingView
The graph above shows how this structure emerges from an uptrend of $ 37 (flagpole) and forms a downward sloping channel to a bullish breakout. Therefore, the AVAX price is currently targeting $ 80.
This level is mainly due to the popular bull flag profit targets. Analysts are targeting a higher breakout price with a length that matches the size of the flagpole. Therefore, based on the breakout ($ 45.64), AVAX’s profit target is around $ 82.
Daily price chart of AVAX and Bull Flag Profit Target | Source: TradingView
The setup comes as AVAX hits another record price, hitting $ 66.47 for the first time, after a 618% rally from the July 20 low of $ 9.25. Meanwhile, the token has risen a staggering 1.988% over the year to date (YTD).
CLEARBoom DeFi and NFT Promote AVAX
The rally in the Avalanche markets is following exactly similar moves on many other smart contract tokens competing with Ethereum, the leading public ledger that powers the decentralized financial space, and the booming non-fungible token.
However, Ethereum’s dominance as the leading smart contract protocol is being called into question due to expensive transaction fees and network congestion issues. The market has therefore created space so that “Ethereum killers” such as Solana (SOL), Cardano (ADA), Fantom (FTM), Avalanch etc. can develop.
For example, the Total Value Locked (TVL) within the Solana ecosystem increased 165% in 7 days, according to data from DeFi Llama, while the price of SOL increased more than 42% over the same period.
Similarly, Fantom’s TVL is up 12.73% and FTM’s price is up 39% over the past 7 days. At Avalanche, the TVL price increased 0.5% and the AVAX price increased 41.1%.
Blockchain and TVL performance | Source: DeFi Lama
In contrast, Ethereum’s TVL fell 22.69%, signaling a shift in liquidity to competing chains.
The price of AVAX began to rise, especially after the Avalanche Foundation launched a DeFi incentive program of the same name on August 18. The organization, which has allocated $ 180 million for DeFi protocols, plans to move from the Ethereum chain to Avalanche.
Benqi, an Avalanche-based hackless decentralized liquidity market protocol, has received $ 3 million in fund financing.
Benqi is the top dapp follow TVL in the Avalanche Ecosystem | Source: DeFi Lama
Avalanche also saw the growth of NFT and DeFi projects that wanted to run in its public ledger. Including a partnership with Topps, a trading and trading card maker that used the Avalanche blockchain to launch the 2021 Topps Major League Baseball Inception NFT Collection.
However, Ethereum is still the dominant force in the smart contracts space. The project is working on a network upgrade to address scalability and gas charging issues, i.e. upgrading the core protocol PoW to PoS in the next year.
We invite you to join our Telegram for faster news: https://t.me/coincunews
According to Cointelegraph