Here’s why AVAX could rally in the coming days

• Franklin Templeton, a global investment firm, is expanding its L1 blockchain focus to include Avalanche.
• Agora launches its fully collateralized digital dollar, AUSD, on the Avalanche network.
• Avalanche price is trading in a falling wedge pattern; Breakout would signal a bullish move ahead.
• On-chain data paints a bullish picture, with AVAX’s TVL rising and its long-short ratio above one.
• A daily candle close below $19.73 would invalidate the bullish thesis.

Avalanche (AVAX) is trading in a bearish wedge pattern on Thursday, and a breakout would signal a bullish trend. Since Thursday, AVAX is up 4%. The recent launch of Franklin Templeton and Agora’s fully guaranteed US digital dollar, AUSD, on the Avalanche network suggests that the price of AVAX will rise in the coming days.

Franklin Templeton and Agora launch their project on the Avalanche network

Franklin Templeton, a leading global investment firm with $1.6 trillion in assets under management, has expanded its blockchain footprint with the introduction of its pioneering on-chain money market fund, the Franklin Templeton OnChain US Government Money Fund (FOBXX ), on the Avalanche network. It marks the first US-registered mutual fund to use a public blockchain to process transactions and hold shares, underscoring Avalanche’s growing institutional infrastructure and its role in shaping the future of finance.

In addition, Agora launched its fully collateralized US digital dollar, AUSD, on the Avalanche network, embodying the principle of monetary neutrality with an open model that encourages various businesses – from exchanges to fintech – to get involved and benefit from the growth of the network. By leveraging Avalanche’s EVM compatibility, sub-second transaction finality, low fees, and customizable infrastructure, AUSD could attract increased users and liquidity to the Avalanche platform.

Avalanche price shows potential for a rally ahead

Avalanche price is trading in a bearish wedge pattern formed by merging multiple highs and lows with the mid-March trend lines. The breakout of this pattern generally signals a bullish move. At the time of writing, it is trading 4% higher at $24.49 on Thursday.

If AVAX breaks and closes above the bearish pattern, it could rise 33% to retest its 61.8% Fibonacci retracement level at $32.45, drawn from the May 22 high to the low of August 5.

The Relative Strength Index (RSI) on the daily chart is trading above its neutral level of 50 and the Awesome Oscillator (AO) is about to trade above its neutral level of zero. If the bulls do come back, then both momentum indicators need to hold their positions above their respective neutral levels. Such a development would add a tailwind to the ongoing rally.

AVAX/USDT Daily Chart

Crypto tracker Artemis data shows that Avalanche’s TVL rose from $832.3 million on Monday to $891.1 million on Thursday, a steady increase since August 5.

This 7% increase in TVL indicates growing activity and interest within the Avalanche ecosystem. It suggests that more users are depositing or using assets under AVAX-based protocols, adding credence to the bullish outlook.

AVAX TVL diagram

According to Coinglass data, the Binance long-short AVAX ratio is 1.66. This report reflects bullish market sentiment as the number above suggests that more trades are anticipating the asset’s price to rise, supporting Avalanche’s bullish outlook.

AVAX long-short ratio chart

Despite the bullish thesis signaled by both chain data and technical analysis, the outlook will change to the downside if Avalanche’s daily candle closes below the August 16 low of $19.73. This scenario could lead to a 12% crash to retest its August 5 low of $17.33.