Over the past 24 hours, Avalanche (AVAX) has experienced a substantial increase in its value. This surge can be attributed not only to general market conditions but also to a significant development within the Avalanche ecosystem.
Avalanche Foundation Initiates AVAX Repurchase Plan
The Avalanche Foundation recently made headlines by revealing its decision to repurchase AVAX tokens from the inactive crypto project, Luna Foundation Guard (LFG). This move marks a crucial milestone for the platform.
In the announcement, the Avalanche Foundation disclosed its agreement to repurchase all AVAX tokens that were previously sold to the Luna Foundation Guard (LFG). This initiative, which is awaiting approval from the bankruptcy court, will result in the return of 1.97 million AVAX tokens to the Foundation.
LFG, the entity behind the collapsed Terra ecosystem in May 2022, had spent $2.8 billion in crypto assets to support the peg of the algorithmic stablecoin TerraUSD (UST). Despite their efforts, they were unsuccessful. AVAX made up more than 40% of LFG’s reserves, valued at over $137 million, along with other significant assets like Bitcoin [BTC] and Binance Coin [BNB].
Market Responds Positively to AVAX Token Repurchase
On October 11, following the Avalanche Foundation’s announcement on X (formerly Twitter), AVAX witnessed an immediate response in the market. Within 24 hours, AVAX saw a 6.15% increase, rising from approximately $25 to $27. Currently, it is trading well above $28, having increased by an additional 3%.
However, AVAX is facing resistance, with its 200-day moving average near the $30 mark. Sustaining its bullish trend, as indicated by the Relative Strength Index (RSI), could potentially transform this resistance level into support.
AVAX Gains Momentum and Popularity
Aside from the price surge, Avalanche has gained traction as one of the top trending assets in the market. According to Santiment data, AVAX ranked as the fourth-most trending asset, with a 68% positive sentiment.
CoinMarketCap listed AVAX among the top 15 assets by market capitalization, showcasing the highest gains among the leading assets in the last 24 hours, with a 9% increase.
Further analysis of its total Open Interest on Santiment revealed a significant rise over the same period, with Open Interest climbing from roughly $292.6 million to around $312.4 million by the end of October 11. Currently, Open Interest stands at over $322 million.