An analyst now says AVAX price may surge 390% amidst challenges surrounding its current revenue levels.

Since August, Avalanche (AVAX) has seen a price increase, breaking free from a long-term corrective trend.

However, it has struggled to maintain this upward momentum and is close to its levels before the breakout.

Despite this, the long-term outlook for AVAX remains positive.

Let’s delve into the price action across different time frames to assess what might lie ahead this year.

Key Insights

• Avalanche has successfully broken out from a long-term price channel.
• The subsequent price increase has not been substantial.
• The question remains: Can AVAX regain its upward momentum?

Avalanche’s Revenue Challenges

Avalanche gained attention recently due to the success of its game “Off The Grid,” which became the top free game on the Epic Games Store.

However, researcher Boccaccio highlighted some of Avalanche’s challenges in generating value.

The platform appears to be shifting its focus towards the gaming and institutional sectors.

Currently, it employs a stake-to-validate model, with plans to introduce a pay-as-you-go model in the future.

The stake-to-validate model requires validators to stake AVAX upfront, creating demand and buying pressure.

However, the costs for staking can be significant—ranging from 16,000 to 256,000 AVAX—making it expensive for new Layer-1 projects on Avalanche.

This could pose a problem for GUNZ, a Layer-1 blockchain for AAA games built on Avalanche, especially since it recently achieved 4.5 million transactions in just 24 hours.

In contrast, the future pay-as-you-go model would be less costly for Layer-1s, as fees would be based on usage.

While this could attract more developers to Avalanche, it may also reduce revenue for the main chain.

Avalanche is already facing revenue challenges compared to other Layer-1 and Layer-2 chains.

Over the past 90 days, Avalanche ranked 11th with just $2.05 million in revenue, while competitors like Tron, Ethereum, and Solana reported revenues between $54 million and $594 million.

On a brighter note, Avalanche has partnered with Chainlink and other financial institutions, including Euroclear and Swift, to leverage AI and decentralized oracles to address fragmented data in corporate actions.

This initiative aims to standardize unstructured data and enhance interoperability through Avalanche’s blockchain.

Additionally, Avalanche has introduced the Avalance crypto card, which can be used anywhere Visa is accepted.

Also Read: Analyst Now Predicts A 5,000% Rally For SHIB

Technical Analysis

The weekly chart for AVAX shows that the price has risen since bouncing off a long-term support level of $20.50 in August.

This upward movement led to a breakout from a long-standing descending channel that had persisted since the yearly high in March, indicating an end to the correction.

However, the price hasn’t surged as expected following the breakout and is currently hovering near the breakout level of $25.

Technical indicators have yet to confirm a bullish reversal, with the Relative Strength Index (RSI) at 50 and the Moving Average Convergence/Divergence (MACD) still below zero, despite a bullish crossover.

Nevertheless, a completed five-wave increase followed by a W-X-Y correction supports a bullish outlook.

If the next upward movement mirrors the previous one, AVAX could potentially reach a high of $133, which represents a 390% increase and would be close to its all-time high of $146, according to the CCN analyst.

While the weekly chart appears bullish, the daily chart reveals some weaknesses.

Currently, AVAX is trading near the support trend line of an ascending parallel channel and recently deviated above the minor resistance at $29 before falling back.

A breakdown from this channel could lead to a decline to the next support level at $22.50, after which the price could initiate a long-term upward trend.

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Also Read: Analyst Now Predicts A 5,000% Rally For SHIB

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