Avalanche (AVAX) recorded a recovery of nearly 2% on Wednesday, alleviating some of the pessimistic sentiment from the beginning of the week. This boost came from SkyBridge Capital, as the company tokenized $300 million in assets from hedge funds on the Avalanche blockchain. At the same time, the significant increase in bullish bets in the derivatives market has further ignited the confidence and new expectations of investors towards AVAX.
SkyBridge Capital brings two hedge funds onto the blockchain
SkyBridge Capital, a company founded by Anthony Scaramucci, has just announced a strategic partnership with Tokeny and its parent company Apex Group to bring its two flagship investment funds onto the Avalanche blockchain.
"The tokenization of funds on Avalanche, combined with the technology infrastructure and operational solutions from Tokeny and Apex Group, marks an important step in the journey to modernize the alternative investment space," said Scaramucci – Founder and CEO of SkyBridge Capital.
Specifically, the two funds Digital Macro Master Fund Ltd. and Legion Strategies Ltd. will be converted on-chain according to the ERC-3643 standard, marking a significant milestone not only for SkyBridge but also for Avalanche, as this platform continues to assert its pioneering role in the field of tokenizing real-world assets (RWA).
Bullish bets and AVAX's OI both increased
According to data from CoinGlass, the open interest (OI) of AVAX has increased by over 0.50% in the past 24 hours, reaching $740.78 million. Typically, an increase in OI indicates new capital flowing strongly into the market, thus reflecting growing confidence from investors.
Notably, the bets on the bullish trend in the AVAX derivatives market also surged during the same period. The Long/Short ratio currently stands at 1.004, up from the previous level of 0.9312, as the number of long positions shot up to 50.1%, surpassing the 48.22% figure from Tuesday. However, the Long/Short ratio remains relatively balanced, indicating that investor sentiment overall remains quite neutral.
Avalanche 'stuck' at the EMA region
On Sunday, Avalanche (AVAX) failed in its attempt to break through the significant supply area at $25.50 – the 38.2% Fibonacci retracement level calculated from the peak of $53.98 on December 8 to the bottom of $16.04 on April 6. This miss quickly led to two consecutive down days, causing AVAX to lose nearly 11% of its value.
As of the time of writing, AVAX is trading around $22.77, after bouncing from the 100-day EMA at $22.26. The recovery is currently testing the 50-day EMA at $22.71, while the bulls are aiming for the 200-day EMA at $23.39. The short-term moving averages now serve as immediate support and resistance levels, clearly reflecting the tension in price volatility.
However, signals from technical indicators lean towards a pessimistic scenario. On the daily frame, the MACD line crossed below the signal line on Tuesday, triggering a sell signal on the MACD indicator and warning of a potential return of the downtrend. Meanwhile, the RSI index is at 47, fluctuating near the neutral line, indicating that the market is in a fragile balance.
If the daily candle closing price is below the 100-day EMA at $22.26, selling pressure is likely to increase, opening up the risk of pulling AVAX back to the pivot area on August 3 around $20.57.