Avalanche News: AVAX Surges 10% Following Avalanche Foundation’s Repurchase Deal with Luna Foundation Guard
The price of AVAX has surged by nearly 10% in just a few hours after the Avalanche Foundation announced a significant repurchase agreement with the Luna Foundation Guard (LFG) – the organization tied to the Terra blockchain. This development has driven AVAX closer to the $30 mark, with its market capitalization surpassing $11.5 billion.
Avalanche to Buy Back Tokens from Luna Foundation Guard
The Avalanche Foundation has confirmed a new agreement to repurchase all AVAX tokens sold to the Luna Foundation Guard back in April 2022. However, the deal still requires final approval from the bankruptcy court. News of this agreement has ignited a wave of optimism in the market, encouraging investors to buy up AVAX in anticipation of further price gains.
Prior to LFG’s bankruptcy in mid-2022, the foundation held 1.97 million AVAX tokens valued at around $60 million. These tokens were originally acquired as part of LFG’s reserve strategy to strengthen the UST stablecoin.
This strategic move by Avalanche aims to prevent LFG from breaching the original terms of the token agreement and to protect AVAX from the risks associated with bankruptcy-related liquidations. In early 2023, LFG began moving these assets following the resolution of legal issues between Terraform Labs and the U.S. Securities and Exchange Commission (SEC). Once the buyback deal is finalized, the Avalanche Foundation will reclaim the 1.97 million AVAX tokens, further enhancing its ability to foster growth and development across the Avalanche ecosystem.
What’s Next for the AVAX Price?
The buyback announcement has provided a significant boost to investor confidence, with many anticipating that the repurchase will create upward pressure on AVAX by reducing its circulating supply. At the time of writing, AVAX is up 9.33% and trading at $28.49.
From a technical analysis perspective, AVAX has recently broken out of a falling wedge pattern that has formed over the past few months, indicating a strong bullish trend. The Relative Strength Index (RSI) sits around 49.8, close to neutral territory, while the Moving Average Convergence Divergence (MACD) is positive at 0.19, signaling growing momentum.
Crypto analyst ‘Crypto Winkle’ believes that if AVAX breaks through the $30 resistance level, the rally could extend to $50 in the coming weeks. Market analysts are similarly optimistic, given the reduced token supply and improving market sentiment.
In addition to the token repurchase, Avalanche is gaining traction as a preferred blockchain for traditional financial institutions. Earlier this week, Colombian neobank Littio announced it would migrate from Ethereum to the Avalanche blockchain, further underscoring the platform’s growing appeal in the financial sector.
The strategic repurchase, combined with increasing institutional adoption, suggests that AVAX’s bullish trend may continue in the near future. Investors and analysts alike will be closely watching whether the altcoin can cross the critical $30 threshold and maintain its momentum.
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