AVAX, the native crypto of the Avalanche blockchain ecosystem, has surged 16% in less than 48 hours amid disclosure that the Avalanche Foundation will repurchase all 1.97 million tokens it sold to the Luna Foundation Guard (LFG) in April 2022. According to reports, the parties have agreed on the deal and are waiting for approval from the bankruptcy court.
Notably, AVAX’s price reversed from a slight pullback on Thursday, October 10, about a day before the parties announced the agreement. The blockchain token’s price bounced off support at $25.04, embarking on a steady rally with significant momentum. TradingView’s data shows AVAX trading for $28.13 at the time of writing after reaching a $29.01 high earlier in the day.
The scalability-focused crypto’s price behavior for the past two days signals a bullish outlook triggered by the announcement. It suggests that AVAX bulls are filling their bags and readying their portfolios ahead of the expected court approval. Crypto analysts expect the 1.97 million AVAX repurchase to reflect a high demand for AVAX and inject more bullish momentum into the crypto token’s price and market capitalization. CoinmarketCap’s data reflects a 7.82% increase in AVAX’s market capitalization in the past 24 hours.
In the meantime, the Avalanche Foundation has explained the reason behind its token repurchase plans from the LFG. In a recent post on X, the Foundation noted that the action would protect the LFG from violating the original agreement’s restrictions on the tokens’ use and shield them from the complexity of a bankruptcy trustee liquidation.
The Avalanche Foundation further noted that the token repurchase exercise will enhance its ability to support the ongoing growth and development of the Avalanche ecosystem, considering the effect the 1.97 million AVAX it aims to repurchase would have on the Foundation’s holdings.
With the latest surge, AVAX has broken above notable support at $28.00, flipping the crypto token’s technical outlook into a potentially bullish trend. Confirming this breakout will open the way for higher levels, with AVAX’s next price target at the $30.86 resistance established on September 27.