The integration of Avalanche [AVAX] into traditional finance continues with ParaFi Capital planning to tokenize a portion of its $1.2 billion holdings on the blockchain. This move complements the increasing momentum of AVAX, with potential for significant price gains.
Currently, AVAX is undergoing consolidation in a descending wedge pattern on the daily chart following the end of the previous bullish cycle in April.
Market analysts are closely monitoring the AVAX/USDT pair, anticipating a breakout above $28 that could propel the price towards $50, offering a potential return on investment exceeding 104%.
In the event of failing to breach $28, a retesting of support levels at $24.9 or $17.25 could be on the horizon.
Exploring Historical Concentration of Ownership
On-chain metrics are further reinforcing the positive outlook for Avalanche. Staked AVAX has increased by 6%, DeFi total value locked (TVL) surged by 11%, and stablecoins on the Avalanche blockchain rose by 13%.
These metrics indicate a growing confidence in the network’s ecosystem.
Moreover, analysis of historical ownership distribution reveals minimal shifts, with a noticeable uptick of 4.38% in retail ownership and a 12% increase in investor ownership.
While whale ownership experienced a slight dip of 6%, the overall trend remains bullish, supported by the strong price performance.
Examining Avalanche Addresses by Holding Period
Further insight into AVAX tokens based on the duration of holding shows an uptick in long-term holders.
Holders with a tenure exceeding a year saw a 5% increase, while those with holdings between one and 12 months witnessed a marginal decline of 0.4%.
Day traders, who are more actively involved, tend to hold AVAX for shorter durations, contributing to heightened on-chain activity.
Analysis of Relative Strength Index (RSI) Signals
The relative strength index (RSI) currently stands at a neutral value of 59, with the stochastic RSI at 81, signaling an overbought condition.
Despite being overbought, this does not always indicate an imminent reversal. Often, it signifies bullish momentum for AVAX, particularly when other indicators do not suggest a downturn.
Traders interpret this as a positive indicator for the potential upward movement of AVAX’s price.
With a confluence of bullish signals from technical analysis, on-chain data, and ownership trends, AVAX seems well-positioned for significant price appreciation in both the short and long term.