Avalanche （AVAX） has experienced a significant decline, losing 12% in the past week. Despite this, an upcoming upgrade proposal may help the token recover.
Points
- AVAX has lost 12% in the past seven days.
- The token is on a downward trend since last month.
- Proposal ACP-77 aims to simplify the subnet launch system for developers.
- The proposal may lower financial barriers and enhance decentralization.
- AVAX bulls have found support around the $26-$29 range.
Avalanche （AVAX） is currently experiencing a downward trend, having depreciated by 12% in the past week. This decline continues a trend that started last month, causing concern among investors and traders.
Despite the bearish trend, Avalanche is maintaining its momentum with a new upgrade proposal, ACP-77. This major proposal by the Avalanche Foundation aims to simplify the system for developers, enhancing the flexibility of launching subnets on-chain. Avalanche subnets function like layer-1 blockchains, using the mainnet as a bridge between subnets.
The current system requires subnet validators to stake a minimum of 2,000 AVAX, which can be a significant financial barrier for developers with limited funding. ACP-77 proposes to remove this financial barrier and the requirement for mainnet validation by subnet validators. This means developers won’t need a substantial upfront financial commitment and can focus more on development.
Additionally, the proposal will enhance the decentralization of the platform. Upon approval, subnets will be granted more autonomy regarding certain settings they wish to implement. In exchange for removing mainnet validation, subnet validators will instead validate the P-chain （platform chain）, making resource allocation more efficient.
If approved, this proposal is expected to have a positive impact on the platform by lowering costs and resource requirements for developers, potentially attracting new developers to build on Avalanche and enhancing the platform for users.
Although AVAX has been on a downward trajectory since the beginning of the year, AVAX bulls seem to have found support around the $26-$29 range. This support and resistance range offers strength to both bulls and bears. However, the bulls currently hold an advantage.
The market has corrected to a more sustainable level, and major cryptocurrencies like Bitcoin and Ethereum are positioned to potentially rise, which could pull the market, including AVAX, upward. AVAX’s high correlation with Ethereum suggests it will follow the general market trend once the bearish sentiment diminishes.
Macro-economic factors will also play a role in influencing major tokens, which could either support or hinder value growth in the market. AVAX bulls are advised to consolidate their current position and wait for a suitable opportunity to capitalize on potential growth. If the opportunity presents itself, AVAX has the potential to reach $34 in the medium to long term.
Explanation
- The recent 12% decline in AVAX reflects ongoing market challenges, but the proposed upgrade, ACP-77, offers a potential recovery path.
- Simplifying the subnet launch system and reducing financial barriers can attract more developers and enhance platform growth.
- Finding support around the $26-$29 range provides a foundation for potential recovery, supported by the overall market trend.
- Investors should monitor macro-economic factors and broader market movements, as they will significantly impact AVAX’s price trajectory.
