- Avalanche so as to add the USP stablecoin into its checklist of choices.
- The battle between AVAX bulls and bears intensifies as promote stress threatens to erase latest features.
The crypto market simply concluded an fascinating week marked by an extension of the bullish momentum initially of this 12 months. Avalanche simply made issues extra satisfying after a serious announcement whereby it revealed that it’s going to host a brand new stablecoin.
Avalanche has formally confirmed that it’s going to assist the stablecoin USP created by Platypus DeFi. The latter beforehand confirmed that the stablecoin will probably be in Avalanche’s most important pool which can play an necessary position in USP’s stability. As well as, its collateralization mechanism will use different stablecoins.
🧐 How does the Adaptive Peg Stabilizer implementation preserve $USP’s peg to 1 greenback? Let’s discover out on this thread!
USP #stablecoins will probably be listed within the Essential Pool, and one of many main issue that have an effect on USP’s worth is its protection ratio within the stated pool. 🧵 pic.twitter.com/6W8r5TMP8f
— Platypus 🔺 (🦆+🦦+🦫) (@Platypusdefi) December 22, 2022
Much more fascinating is the potential affect of the stablecoin on the demand for Avalanche’s native cryptocurrency AVAX. The stablecoin rollout will facilitate extra utility for the Avalanche community. A transfer that can probably gas extra demand for AVAX. The timing of the announcement can also be value noting notably as a result of AVAX’s newest worth motion.
AVAX bulls wrestle with the 200-day Shifting Common
AVAX simply concluded a robust run-up for the second week in a row. It managed to climb by as a lot as 74% from its January low at $10. Nonetheless, it pulled again to a $17.05 press time, with promote stress manifesting after briefly crossing above the 200-day Shifting Common.
Whereas the 200-day MA might have acted as a psychological promote zone, it isn’t the one indication of a possible pivot. The worth additionally occurs to be in overbought territory, the place many buyers are prone to begin taking income.
Ought to we anticipate a serious pullback?
A robust selloff could be on the playing cards if AVAX holders, particularly whales begin offloading closely. This may set off a bearish cascade that may probably lead to a large retracement.
Maybe a few of Avalanche’s metrics might assist paint a greater image of the potential consequence. For instance, it simply skilled a serious quantity surge between 11 and 13 January.
This was the biggest surge it has skilled within the final 4 weeks however the volumes have tapered off now. The quantity enhance was preceded by an uptick within the weighed sentiment metric. The latter displays the large liquidity influx that entered into AVAX.
Real looking or not, right here’s AVAX’s market cap in BTC’s phrases
The identical weighted sentiment metric has tanked, indicating one other sudden sentiment shift favoring the bears. The whole time AVAX volatility was additionally up and so was the market cap reflecting the robust accumulation.
AVAX’s market cap did expertise a slight dip after the latest peak earlier than recovering. This can be a signal that there was some promoting stress on the high.
The beforehand talked about quantity surge might have resulted from buyers FOMOing in that has created sufficient liquidity to protect AVAX from extra worth slippage. Whether or not the identical will maintain will depend upon whether or not the bulls can thrust back the bears.