Key Takeaways
What triggered AVAX’s 11% rally to an 8-month high?
The launch of South Korea’s first KRW-backed stablecoin drove massive investor interest and network activity.
What are some key levels to watch?
If momentum continues, AVAX could target $36.5, but if the rally fades, the price may retrace to $28 for support.
Avalanche [AVAX] surged 11.2% to an 8-month high of $33.3 before slightly retracing to $32.92 at press time.
At the same time, the altcoin’s volume surged 88% to $1.78 billion, while market cap jumped 9% to $13.9 billion.
Such a spike in volume and market cap indicated increased capital influx and growing on-chain activity. But what triggered the uptick?
The Korean market inspires an AVAX rally
Significantly, AMBCrypto observed that the Korean market primarily drove the recent AVAX price uptick.
According to the Avalanche team, South Korea’s BDACS launched the first KRW-backed stablecoin, KRW1, on the network.
This stablecoin will be fully collateralized with Korean Won held at Woori Bank, following successful proof of concept validation.
On-chain activity chugged along
After reports regarding the KRW1 stablecoin on Avalanche, the blockchain’s network activity and adoption soared.
According to data from Defillama, Avalanche’s Daily Active Addresses surged to a 2-week high of 70k.
Source: Defillama
Such a spike in the number of users reflects a strong surge in network usage and actual demand. At the same time, Avalanche’s user activity has spiked across the entire ecosystem.
For example, the number of users at LFJ_gg surged 40.7% to 107.6k, and users on PharaohExchange up 77.86% to 78.7k.
Source: Token Relations
Other platforms, such as Metamask, saw a 29% surge in users, reaching 9.9k, reflecting growing demand for the Avalanche blockchain.
Futures capitalize
Notably, as capital flowed into Avalanche, it mostly poured into the Futures market. According to Defillama, Perpetuals Volume surged from $5 million to $15.2 million, adding over $10 million within 24 hours.
Source: Defillama
Such a spike in perps volume suggests that investors rushed into the market to take Futures positions, either long or short, reflecting a surge in new positions opened.
Impact on AVAX?
Undoubtedly, AVAX rallied after the launch of the KRW1 stablecoin, which inspired investors in the Korean market to accumulate AVAX and take Futures positions.
For that reason, the altcoin’s upward momentum strengthened, with the Directional Momentum Index (DMI) rising to 35 at press time.
Likewise, its Relative Vigor Index (RVGI) surged to 0.34, further validating the strength of the uptrend.
Source: TradingView
Therefore, if market conditions experienced over the past day hold, AMBCrypto observed that AVAX will make more gains and target $36.5.
Conversely, if the uptrend was speculative, and momentum fades as soon as it emerges, AVAX will retrace to $28.
