Avalanche analysis 

Avalanche (AVAX) was launched in 2020. Smart contracts were the main focus while ceating Avalanche. And the top priority of Avalanche remained the development of decentralised applications (dapps) and subnets. Avalanche (AVAX) has performed well in the past few weeks. By the end of last week, it was up 33%, with all times high of $146.96 and no.9 as of 25 November 2021. It had a total gain of 3000% since its offering price.

This recent rally came up as a result of an announcement by AVA labs regarding their joint venture with consulting firm Deloitte of the Federal Emergency Management Agency (FEMA). They aim for the improvement of the security, speed, and accuracy of their platform. In addition, this firm, Deloitte, will be using the Avalanche blockchain platform. The reason behind using Avalanche is to build a more effective disaster-relief platforms.

Avalanche gave a link[1] to the current live burning, which shows AVAX being burnt. The team elected to burn all fees as a policy. Therefore this amount will continue to climb as the token is utilised. The act of burning tokens depletes the available supply, creating scarcity. In principle, assuming demand remains constant, this process should raise the token price. While Ethereum has many rivals, Avalanche indicates that better scalability and an emphasis on DeFi are still essential business factors.

Key Takeaways

  • On Monday, Avalanche revealed that it had burnt over 400,000 AVAX tokens since its inception in 2020, amounting to around $55 million in terms of fiat currency.
  • Avalanche secures a spot among the Top 10 cryptocurrencies after pushing Litecoin below, as the price surges 100%.
  • "There is nothing specific about the Deloitte agreement that is transformative to Avalanche," Hougan adds, "but it is a signal that Avalanche may have the right ingredients to compete with Ethereum and other all-purpose blockchains long term."
  • President Ava Labs, John Wu said, "Close As You Go features a user-friendly interface backed by the cutting edge of blockchains, helping state and local governments focus on their recovery, rather than extensive claims processes," in a statement last week.
  • According to Zhu, an AVAX investor, Ethereum platform users have complained about excessive gas prices, which refer to transaction costs. As a result, they may seek alternative platforms such as Avalanche or Solana if Ethereum does not change soon enough. Avalanche claims that its gas prices are lower than Ethereum's because it can execute transactions at a quicker rate. According to Avalanche claims, they can process 4,500 transactions per second. In contrast, Ethereum's 15 transactions per second seem too low.

What is Avalanche (AVAX)

Because both have smart contract features, Avalanche is frequently compared to Ethereum. Avalanche, on the other hand, seeks to execute quicker transactions with cheaper costs than Ethereum. In addition, Avalanche uses a proof of stake (PoS) paradigm, in which validators validate transactions based on the number of coins they have. Proof of stake (PoS) is said to consume much less energy compared to the other methods, making it more cost-effective. Avalanche intends to have several chains, with some providing essential activities and others being more application-specific. Meanwhile, all non-core blockchains (called subnets) must rely on validators that stake AVAX on any of Avalanche's three basic platforms, named P-Chain, X-Chain, and C-Chain.

Regardless of the excitement surrounding Avalanche, it is critical to investigate and understand the dangers associated with any cryptocurrency before investing. Cryptocurrencies are viewed by financial analysts as volatile, speculative investments. It is possible that after a strong rally, you see a market tanking against the investors' bias. In that case, the investors only need to secure their positions before such a thing happens.

As of 25 November 2021, Avalanche stays on no.9 with a market price of $121.49, with a 15.51 gain compared to the previous week, with a market cap of $ $26,930,174,887, a current circulating supply of 223,847,721 AVAX, and making 31.09% circulation of coins of its total supply. The total supply is limited to $ 720,000,000 AVAX tokens.

Technicals of Avalanche (AVAX)

Here are the technicals of Avalanche:

Source: InteractiveCrypto

 

Avalanche (AVAX) Price Analysis 2021

Let's look at the chart of AVAX Vs. USD and see what useful information we can find from it.

Avalanche price chart

Overall, Avalanche has a positive gain throughout 2021. Let's break down its chart analysis to see if we have an opportunity.

Weekly Chart Breakdown of Avalanche (AVAX)

Avalanche price chart

Source: Trading View

When looking at the weekly chart, we can see the recent high above $145 and rejection from that point onwards. The nearest and most recent weekly support is at $78.65. Therefore, long-term investors might find a buying opportunity around $78 support. The weekly sentiment of Avalanche AVAX is as follows:

Source: InteractiveCrypto

Weekly sentiment remains bearish as the sellers see a move towards $78.

Daily Chart Breakdown of Avalanche (AVAX)

Keeping in mind the weekly chart, we can see a strong bullish impulsive move towards all times high around $145 and a strong rejection from there. Overall, market sentiment and technical suggest further decline towards $78. So if you are looking to buy Avalanche AVAX, please look for an entry around $78.

4h Chart Breakdown of Avalanche (AVAX)

Looking at the 4h chart, we see a strong leg down after a double top on an all-time high. EMA20 works as the resistance at this point for the market, and we could see a strong move down towards $97 and even further towards $78 if the market sentiment remains unchanged. So if you are looking to buy on a 4h timeframe, look for opportunities around $97 or $78.

Conclusion

The current drop looks to be a more technical, market-driven move. As a result, buyers looking for Avalanche exposure have what seems to be a nice drop to go long here. Finally, only time will tell if this price drop was worthwhile. However, it appears to be appealing to people who believe they may have lost out on Avalanche this week.

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