Increase in Avalanche RWA by 58% - Implications for AVAX pricing explained
The Avalanche blockchain, known for its scalable Proof of Stake (PoS) consensus, has been experiencing growth in both price and chain activity. The total market capitalization of Real World Assets (RWAs) on Avalanche has increased by nearly 58% in the last few days, reaching $305.25 million. This surge is accompanied by a rise in the total holders of RWAs, now standing at 7,725.
Institutions such as Franklin Templeton, Grove Finance, and Centrifuge are actively involved with the Avalanche chain, contributing to its growing popularity. The total number of stablecoin holders on Avalanche has also increased, reaching 3.44 million. Stablecoins have been key drivers of growth on the Avalanche chain, with the market cap of stablecoins rising by 30% in a month.
The total stablecoin transfer volume on Avalanche surged by 6x in the last three months across 12 assets, indicating a growing use of the platform for transactions. This increase in volume, as per CoinGlass data, is looking good, and is further confirmed by the surge in Futures volume for AVAX, currently at approximately $1.018 billion.
The surge in volume is considered further confirmation of institutional demand and potential whale activity. The Bubble Map shows an increase in volume, indicating a build-up in the AVAX Futures market. The OI-weighted funding rate for AVAX Futures is at 0.0058%, slightly higher than the day's open value but lower than the reading of the last two days (0.01%).
The price of AVAX reached a high of $27 on 28 July, but has remained subdued below this level since then, consolidating between $22 and $26 for the past month. The current reading of the OI-weighted funding rate is a slight hike from the day's open value, suggesting a return of traders after the RWAs and stablecoins data release.
However, the risk of AVAX dropping to $21 cannot be overlooked if the price breaks below the support of the SuperTrend. The altcoin's price could potentially bounce back above $25, representing a 5% gain, if it rejects a break of the support of the SuperTrend.
In conclusion, the Avalanche blockchain continues to attract institutional interest and grow in popularity, driven by its scalable PoS consensus, high transaction throughput, and lower fees, making it competitive with other Layer 1 blockchains. While the price of AVAX has been consolidating, the increase in volume and funding rate suggest a bullish outlook for the altcoin.
