- Avalanche managed to forge an important partnership that could make it a stronger contender in the metaverse.
- Despite the hype surrounding a new collaboration, AVAX sees little demand and supports retest.
Avalanche could be about to spice things up in the metaverse thanks to a major development that could be a game changer. The development in question is a collaboration with Chinese tech giant Alibaba.
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According to Avalanche’s official announcement, the two have formed a partnership that will see Avalanche as the conduit for Alibaba’s metaverse pursuits.
The partnership will focus on Alibaba’s Cloudverse, the Chinese company’s cloud computing segment that already has millions of customers. Avalanche will provide the decentralized technology to support this metaverse enterprise.
Today, @alibaba_cloud announced that they are entering the metaverse – on Avalanche!
With Cloudverse, Alibaba Cloud’s millions of customers can easily deploy custom metaverses and unlock new dimensions for consumers.#Avalanche will provide all blockchain elements for Cloudverse👇 pic.twitter.com/AlibhHjidN
— Avalanche 🔺 (@avax) May 4, 2023
The partnership represented a significant opportunity, especially for Avalanche, which is poised to tap into a wave of potential value and liquidity. The magnitude of the partnership cannot be underestimated as Alibaba is one of the largest companies in the world.
Renewed hope for AVAX?
Big announcements with partnerships that have the potential to bring in a wave of new users usually lead to increased demand for a cryptocurrency. However, this is not always the case, especially in situations where the expected change will be gradual. Nevertheless, some of Avalanche’s on-chain stats already registered a spike in excitement.
Investor sentiment has improved slightly over the past two days, as evidenced by the recovery of weighted sentiment from a month low. There was also a big spike in social dominance, so a significant gain in terms of visibility.
Source: Sentiment
One of the ways to see if excitement has turned into strong demand is to evaluate on-chain volumes. AVAX on-chain volume experienced a slight increase over the past 24 hours, though probably not strong enough to support enough bullish excitement.
Source: Sentiment
Despite the lack of strong demand in the first 24 hours after the announcement, there was one key factor that may still have supported a strong rebound. AVAX price action was trading within a tight range after finding support near the $16.50 price range. More importantly, the price has recently pushed into a rising support line.
Source: TradingView
Realistic or not, here is AVAX’s market cap in terms of BTC
The same support level could act as a bounce-off zone if AVAX can secure enough rising demand in the coming days. The MFI has already turned around after earlier outflows. Weak rising demand or strong selling pressure can also manifest itself in shifts in market sentiment in favor of the bears.
