AVAX Price Shoots 10% As Avalanche Foundation Announces Token Repurchase from Luna

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As a seasoned researcher with over two decades of experience in the dynamic world of cryptocurrencies and blockchain technology, I must admit that the latest developments surrounding AVAX have piqued my interest significantly. The strategic move by the Avalanche Foundation to repurchase tokens from the Luna Foundation Guard (LFG) has set the stage for an intriguing narrative.

The AVAX price has surged by a staggering 10% in the last few hours after the recent announcement by the Avalanche Foundation of a repurchase agreement with the Luna Foundation Guard (LFG) – the entity associated with Terra blockchain – to buy back all tokens sold back in 2022. This has pushed AVAX closer to $30 taking its market cap above $11.5 billion.

Avalanche Agreement With Luna Foundation

According to the most recent update, the Avalanche Foundation is in negotiations to buy back all AVAX tokens they sold to the Luna Foundation Guard (LFG) in April 2022. This transaction is yet to be approved by a Bankruptcy court. This news has sparked significant optimism among investors, causing them to quickly accumulate AVAX tokens in anticipation of potential price increases.

Prior to filing for bankruptcy in the summer of 2022, LFG owned approximately 1.97 million AVAX tokens, which had a value of around $60 million. The Luna Foundation acquired these AVAX tokens to bolster the robustness of its UST stablecoin, by incorporating them into its reserves.

Making a strategic choice, the Avalanche Foundation aims to keep LFG within the bounds of the initial contract and limit AVAX token misuse. Furthermore, this action taken by Avalanche also safeguards assets from the intricacies of bankruptcy trustee asset liquidation. Previously this year, LFG initiated shifting its tokens after settling with Terraform Labs regarding the US SEC.

Once completed, the Avalanche Foundation will take back approximately 1.97 million AVAX tokens, enhancing its ability to nurture progress and expansion within the Avalanche network.

The Avalanche Foundation is working on a deal to buy back all AVAX tokens that were earlier sold to the Luna Foundation Guard (LFG) in April 2022. This transaction is pending approval from the Bankruptcy Court.
This action ensures that LFG would not violate the original…
— Avalanche Foundation (@AvalancheFDN) October 11, 2024

AVAX Price Rally to Continue?

Buying back AVAX tokens by the Avalanche Foundation has given a strong boost to the AVAX price, increasing investor confidence. The purchase of 1.97 million tokens will substantially decrease the amount of AVAX in circulation, which could lead to an increase in the altcoin’s price due to increased demand.

Currently, the cost of Avalanche stands at an increase of 9.33%, trading at approximately $28.49. On its technical chart, the AVAX price appears to be making a nearly perfect breakout from the falling wedge pattern that has been forming over recent months.

Additionally, the Relative Strength Index (RSI) for AVAX is approximately 49.8, and the Moving Average Convergence Divergence (MACD) is currently at 0.19, suggesting a bullish trend. Crypto expert ‘Crypto Winkle’ suggests that if the bulls can push past the significant resistance of $30, there could be further growth in AVAX prices. Many market analysts anticipate an Avalanche price surge to reach $50.

#AVAX Breaking Out! Avalanche showing incredible strength as wedge pattern executes flawlessly
After closely monitoring the descending triangle over several months, it’s now yielding profitable results! A robust influx of capital substantiated this classic pattern, propelling $AVAX into an attractive upward trend, forming a lovely rising channel.
Current…
— Crypto Winkle (@CryptoWinkle) October 10, 2024

Moreover, it’s worth noting that the Avalanche blockchain is becoming increasingly popular among traditional financial institutions as a platform for introducing new products. Just this past week, Colombian neobank Littio made the move to transition its operations from the Ethereum blockchain over to the Avalanche blockchain.

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2024-10-12 08:07