AVAX Price Shoots 10% As Avalanche Foundation Announces Token Repurchase from Luna

Avalanche Foundation’s Agreement with LFG

Avalanche has agreed to buy back the AVAX tokens sold to LFG, pending bankruptcy court approval. LFG originally purchased these tokens to strengthen reserves for Terra’s UST stablecoin before its collapse in 2022. The repurchase aims to prevent LFG from breaching the original agreement and protects AVAX from the complexities of bankruptcy-related asset liquidations.

This strategic decision is expected to reclaim 1.97 million AVAX tokens, worth $60 million at the time of sale, boosting Avalanche’s ability to foster growth within its ecosystem.

AVAX Price Momentum and Market Outlook

The announcement has triggered a significant bullish momentum, with AVAX prices climbing by 9.33% to $28.49. The repurchase will reduce the AVAX circulating supply, creating upward pressure on the price. Technical indicators also suggest a breakout, as AVAX forms a bullish wedge pattern and shows positive momentum with a Relative Strength Index (RSI) near 49.8 and a positive MACD.

Crypto analysts predict further gains, with resistance at $30. If AVAX breaks through this level, a rally to $50 could be on the horizon. Additionally, Avalanche’s blockchain continues to gain traction with traditional financial institutions, such as Colombian neobank Littio, shifting from Ethereum to Avalanche for launching their products.