Why is Avalanche (AVAX) Price Up Today?

NOIDA (CoinChapter.com)— Avalanche’s AVAX token has been on a bull run since Aug. 16, which has helped the token rally nearly 37% to a daily high near $27.1 on Aug. 23.

The token’s recovery took cues from recent developments in the Avalanche ecosystem.

Institutional Interest and DeFi Advancements Fuel AVAX Rally

Avalanche’s recent price surge, with a 30% weekly rally, is driven by increasing institutional interest and notable advancements in decentralized finance (DeFi). Grayscale Investments’ launch of the Grayscale Avalanche Trust offers investors indirect exposure to Avalanche’s ecosystem.

The move has sparked speculation about the potential for an AVAX exchange-traded fund (ETF), given Grayscale’s success in converting its Bitcoin and Ethereum trusts into spot ETFs.

Additionally, Franklin Templeton announced plans to link its $420 million Franklin Onchain U.S. Government Money Fund (FOBXX) to the Avalanche blockchain.

Moreover, the integration allows investors to purchase tokenized shares using Circle’s USDC stablecoin, expanding from Polygon and Stellar to Avalanche. This partnership enhances the credibility and appeal of Avalanche’s blockchain technology.

In the DeFi space, Avalanche is making significant strides with native solutions that enhance cross-chain capabilities, eliminating the need for traditional bridging mechanisms. This innovation reduces the risk of bridge hacks, a common vulnerability in DeFi, and introduces billions of dollars in cross-chain loans.

These developments strengthen Avalanche’s position in the DeFi market and contribute to the positive sentiment, pushing AVAX’s price upward.

The combination of institutional adoption and DeFi innovations positions Avalanche as a formidable competitor to Ethereum. AVAX has recently outperformed many top altcoins and Bitcoin. AVAX remains a cryptocurrency to watch in the evolving digital asset landscape as these trends continue.

Bullish Wedge Breakout Scenario Pushing AVAX Price Up

Meanwhile, the AVAX USD pair is trying to break out of a bullish technical setup called the ‘falling wedge.’

A falling wedge pattern features a pair of converging trend lines connecting lower highs and lower lows, forming a narrowing shape that slopes downward.

The pattern indicates that an asset’s price while consolidating in a downtrend, is losing bearish momentum and preparing for a potential reversal to the upside. Typically, a breakout occurs upward, in line with the overall trend.

To estimate the price target, traders measure the widest part of the wedge at the beginning and project this distance upward from the breakout point. Moreover, a higher trading volume during the breakout confirms the reversal’s reliability, indicating stronger market conviction and a higher likelihood of success.

According to technical analysis rules, the AVAX to USD conversion rate might rally over 212% from its current level to reach the pattern’s projected target near $83.