Avalanche’s AVAX token rallies despite crypto market downturn

AVAX
+1.68%
gained on Monday, despite a downturn in the wider cryptocurrency market.

The native token of the Avalanche blockchain has surged by over 7% in the last 24 hours, currently trading around $35.80. This uptrend comes despite a significant downturn of over 6% in the global cryptocurrency market capitalization, which now stands at $1.6 trillion.

AVAX has significantly outperformed other major altcoins, with many cryptocurrency analysts on X bullish about the token’s prospects. According to analysis from IntoTheBlock, “the number of large AVAX transactions is on the rise, peaking at nearly 1,000 transactions bigger than $100k last week. While this is still not close to levels of the last bull market, it is a positive sign for the bulls.”

CoinShares analyst Max Shannon pointed to another bullish factor. “In November, JPMorgan and Apollo also announced news that Avalanche would be used to test real world asset tokenization, which is likely supportive of price action,” Shannon told The Block.

Price chart from The Block.

Downside pressure

However, one analyst believes the token could soon face downside pressure and that the current gains will be short-lived. “We noticed that AVAX correlates with major cryptos such as bitcoin, but reacts with some delay, so we believe this time is not an exception and finally the token will follow bitcoin’s dynamic,” YouHodler Chief of Markets Ruslan Lienkha told The Block.

Bitcoin and other major digital assets retraced a whole week of gains in the past 24 hours, with BTC slipping below the $41,000 mark. The downturn led to a substantial liquidation of long positions on centralized exchanges. According to The Block’s Data Dashboard, Monday’s ‘long-squeeze’ resulted in the liquidation of more than $85 million in bitcoin long positions.

Today’s volatility resulted in the liquidation of over $500 million liquidations across the entire cryptocurrency market. CoinGlass data indicates that more than $440 million worth of long positions were wiped out, while only approximately $60 million in short positions were liquidated.

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