- The Avalanche Foundation plans to buy back AVAX tokens from a defunct crypto project.
- AVAX owned by LFG worth over $56 million
Avalanche (AVAX) saw a significant rise in its value over the past 24 hours. Not only due to broader market conditions, but also due to a key development within its ecosystem.
The Avalanche Foundation is in the news today after announcing a major plan to repurchase AVAX tokens from a defunct crypto project – marking a pivotal moment for the platform.
The Avalanche Foundation will buy AVAX
In a recent announcement, the Avalanche Foundation revealed that it has agreed to repurchase all AVAX tokens previously sold to Luna Foundation Guard (LFG).
This agreement, currently awaiting approval by the bankruptcy court, will see the return of 1.97 million AVAX tokens to the Foundation.
The Luna Foundation Guard (LFG) is the entity behind the Terra ecosystem, which collapsed in May 2022. To defend the peg of the algorithmic stablecoin TerraUSD (UST), LFG spent $2.8 billion on crypto assets, but these efforts ultimately failed.
According to LFG reserves data, AVAX accounted for more than 40% of its reserves, valued at more than $137 million. Other major assets held by LFG include Bitcoin (BTC) and Binance Coin (BNB).
Positive Market Reaction to AVAX Token Repurchase
Following the Avalanche Foundation’s announcement on October 11 via its X Page (formerly Twitter), AVAX saw an immediate reaction in the rankings.
On the daily charts, for example, AVAX gained 6.15%, going from around $25 to $27 in just 24 hours. At press time, it was trading well above $28, having risen another 3%.
Source: TradingView
And yet, AVAX still faces some resistance, with its 200-day moving average hovering near the $30 mark. If AVAX manages to maintain its current uptrend, as highlighted by its relative strength index (RSI), this resistance level could potentially turn into support.
AVAX gains popularity and dynamism in the market
In addition to the price rise, Avalanche has also gained ground as one of the hottest assets on the market.
For example, Santiment data revealed that AVAX ranked as the fourth most trending asset, with 68% positive sentiment.
Additionally, CoinMarketCap ranked AVAX among the top 15 assets by market capitalization. It saw the highest gains among major assets over the past 24 hours, rising 9%.
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Finally, an analysis of its total open interest in Santiment indicated that it also increased significantly during the aforementioned period. In fact, the The chart shows that its open interest increased from around $292.6 million to around $312.4 million as of the end of October 11.
At the time of writing, Open Interest stood at over $322 million.
Source: Santiment
