The AVAX price has seen bullish movement due to the Avalanche Foundation’s intention to repurchase 1.97 million tokens sold to the Luna Foundation in 2022.
The AVAX price has experienced a remarkable 10% increase in the past few hours as a result of the Avalanche Foundation’s recent announcement of a repurchase agreement with the Luna Foundation Guard (LFG), the entity associated with Terra blockchain, to purchase all tokens that were sold in 2022.
This has increased AVAX’s market capitalization to over $11.5 billion, bringing it closer to $30.
Luna Agreement with Avalanche Foundation
The Avalanche Foundation has recently announced that it has agreed to repurchase all AVAX tokens sold to the Luna Foundation Guard (LFG) in April 2022. Nevertheless, the bankruptcy court has not yet sanctioned the agreement. Bulls have rushed to stockpile AVAX in anticipation of the announcement, which has resulted in substantial bullish momentum for the price.
LFG possessed a total of 1.97 million AVAX tokens, valued at an astonishing $60 million, before its bankruptcy in the summer of 2022. To enhance the stability of its UST stablecoin, the Luna Foundation acquired AVAX as part of its reserves.
The Avalanche Foundation’s strategic decision will prevent LFG from violating the original agreement and limiting the use of AVAX tokens. Additionally, this action by Avalanche will safeguard the assets from the intricacies of bankruptcy trustee liquidation. LFG initiated its token movement earlier this year in response to the Terraform Labs settlement with the US SEC.
The Avalanche Foundation will be able to support the growth and development of the Avalanche ecosystem by reclaiming 1.97 million AVAX tokens upon its completion.
AVAX Price Rally to Continue?
The AVAX price has been significantly influenced by the repurchase of AVAX tokens, which has bolstered investor confidence. The Avalanche Foundation’s substantial acquisition of 1.97 million tokens will substantially diminish the circulating supply of AVAX, thereby exerting upward price pressure on the altcoin.
At the time of publication, the Avalanche price is trading at $28.49, representing a 9.33% increase. Over the past few months, the AVAX price has also formed a flawless breakout from the falling wedge pattern on the technical chart.
Additionally, the Moving Average Convergence Divergence (MACD) is positive at 0.19, indicating favorable momentum, while the Relative Strength Index (RSI) for AVAX is approximately 49.8. Crypto analyst ‘Crypto Winkle’ suggested that a further increase in the price of AVAX may occur if the traders can breach the critical resistance level of $30. The Avalanche price is expected to increase to $50, as predicted by market analysts.
Furthermore, the Avalanche blockchain is emerging as the preferred option for conventional financial institutions to introduce their products to the market. Littio, a Colombian neobank, transitioned its infrastructure from Ethereum to the Avalanche blockchain earlier this week.
