Avalanche Price Analysis: Is this Bullish Indicator Signaling $50 AVAX Retest? 

Key Insights:

• Avalanche (AVAX) price held a $40 support level on Monday, as the bulls put up a strong front despite the tepid sentiment in the broader crypto market. 
• The latest on-chain data readings reflect another significant spike in AVAX-denominated transactions on Monday. 
• Having reclaimed $40, the GIOM on-chain indicator highlights the next major resistance point where strategic traders could hang their take-profit orders. 

Avalanche (AVAX) price held a $40 support level on Monday, as the bulls fiercely battled the resistance, despite the tepid sentiment in the broader crypto market.

On-chain data trends reveal that Avalanche’s fundamental growth factors continued to strengthen, suggesting the price rally could enter another leg up this week. Can the spikes in Avalanche network transactions drive AVAX price towards $50, for the first time since May 2022?

Avalanche Has Recorded 5M Transactions in 5 Consecutive Days

Avalanche’s price action has grabbed media headlines over the past month as it leapfrogged the likes of Cardano (ADA) and Solana (SOL). But this week, the Ordinals inscriptions craze that gripped the prominent EVM (Ethereum Virtual Machine) compatible gains has triggered historic levels of transactional activity on the Avalanche network. 

According to IntoTheBlock, Avalanche has recorded more than 5 million daily transactions on every trading day since Dec 14. The latest reading on 5.94 million AVAX denominated transactions were recorded on Dec 18, the second highest since the inception of the Avalanche project. 

The daily transaction count, as the name implies, measures the level of economic activity carried out daily on a blockchain network.

However, Ordinals inscriptions have been widely criticized for contributing relatively low economic value to the blockchain ecosystem. They have been cricizied for causing congestion, fee spikes and even network outages.

But, due to Avalanche’s superior scalability, relatively low fees, and built in fee-burn dynamics, this Ordinals boom appears to be having a positive impact on AVAX price. 

Interestingly, as Avalanche network transactions crossed 5 million for the fifth consecutive day on Monday, AVAX price reclaimed $40 despite other layer-1 coins like BTC, ETH and ADA enduring a pull back. 

AVAX Price Forecast: Can it Finally Reach $50

Avalanche price looks set to remain in an uptrend as the bulls fend off market FUD (fear, uncertainty and doubt) surrounding the Ordinals Inscription. 

However, to reclaim $50, historical buy/sell trends show that the bulls must first clear the significant resistance at the $43 area. 

The Global In/Out of the Money Around Price (GIOM) data, which groups the current AVAX holders based on their entry prices, affirms this positive outlook.

It shows that 370,022 current holders acquired 9.43 million coins the last time AVAX price crossed $43. After over 1-year of holding at a loss, Avalanche price could experience a pullback if those holders now look to book some profits.

But if the Oridinals inscription keeps triggering more Avalanche fee burns, the deflationary pressure could push AVAX price toward reclaiming $50 as predicted.

Still, the bears could invalidate that positive prediction if AVX price wobbles below the critical psychological resistance at $30. But, in that case, the 811,410 holders that bought 211.4 million AVAX at the maximum price of $37 could offer support. 

If that support level holds, AVAX price can avoid a major correction in the short-term. 

Since the overall sentiment surrounding the broader crypto market still remains largely bullish, Cardano pricavoid that bearish scenario in the short-term.