AVAX price rallies after Avalanche development boost and main network upgrade announcement

AvaX, the native token of the Avalanche ecosystem, has shown resilience, rising 3.45% in the past 24 hours, cheering the blockchain's first major upgrade.

According to data from Cointelegraph Markets Pro and TradingView, the AVAX token broke the barrier created by the 200-day exponential moving average (EMA) on September 26 and reached an intraday high of $29.10. At press time, the Layer 1 token is trading at $28.91, up 10% over the past week and up 12.5% ​​over the past 30 days.

Several factors behind AVAX's bullishness include developments surrounding the upcoming Avalanche9000 update, increased network activity, and a strengthening market structure.

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Avalanche's $40M grant program boosts AVAX's value

The Avalanche Foundation, which supports startups supporting the development and adoption of the Avalanche blockchain network, has announced the launch of a $40 million grant program to support developers building layer-1 blockchains on the Avalanche network.

Christened Retro9000, the program aims to encourage developers to build on the Avalanche network ahead of the much-anticipated Avalanche9000 update.

On September 3, the foundation unveiled details of Avalanche9000, which it described as the “biggest network upgrade” since the blockchain mainnet launched in September 2020 and is designed to increase scalability, improve cost efficiency and improve the developer experience.

As the network becomes more attractive to developers and other users, demand for AVAX will likely increase and the price will likely increase.

Improving the market structure and increasing network activity will restore the growth of AVAX.

From a technical perspective, AVAX is trading above an important interest zone that stretches from $27 to $28.65. Note that the 200-day EMA is in this zone, suggesting that the price of AVAX is sitting on relatively strong support.

Buyer congestion around the indicated support level could provide the tailwind needed to push AVAX higher. If this happens, the token's price could rise to the May 22 high of $41.78, representing a 42% increase from current levels.

The importance of this support zone is reinforced by onchain data from IntoTheBlock. The out-of-/in-the-money AVAX around price (IOMAP) is sitting on relatively strong support versus resistance on the recovery path.

For example, the 200-day EMA at $28 is in the price range of $27.51 and $28.44, with approximately 7.7 million AVAX already bought at 191,230 addresses.

Further confirming AVAX's positive outlook is Total Value Locked (TVL) data, which reflects growth in the project ecosystem. Analyzing TVL data helps investors and developers understand the interest in blockchain. TVL Decentralized Finance (DeFi) projects are similar to bank deposits and can influence the direction of the market.

According to data from Defilama, the Avalanche's TVL is increasing in line with its price. Aug. 5, from $717.4 million to $1 billion, representing a 43.5% increase. The price of AVAX increased by more than 50% during the same period.

This increase in TVL is a sign of increasing user interaction on the blockchain, which leads to an increasing demand for the AVAX token. High demand is often a prerequisite for price growth.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.