Avalanche (AVAX) hit an all-time high of $68.89 on Sept. 16, and over the past few months, the project has begun challenging the Ethereum network’s dominance as a smart contract platform. According to the project's website, the layer-one protocol is capable of processing more than 4,500 transactions per second, with all transactions finally confirmed in less than two seconds.

Since falling to a low of $32.10 on Sept. 7, the price of AVAX has risen 111%, hitting an all-time high on Sept. 16, with 24-hour trading volume surging 200% to 2.8 billion, according to Cointelegraph Markets Pro and TradingView. Dollar.

AVAX/USDT 4-hour chart Source: TradingView

Three reasons for the surge in AVAX price include: the recent $230 million investment from large fund houses, the continued migration of liquidity to the Avalanche network, and new integrations and protocol upgrades that help improve the user experience.

Avalanche is backed by a large fund

After Avalanche announced that several large funds including Polychain Capital, Three Arrows Capital, and Dragonfly Capital participated in the project’s $230 million financing, the price of AVAX rose sharply on September 16.

This is the largest investment in the Avalanche ecosystem to date, showing that large institutional players are starting to take a serious interest in this Ethereum competitor.

The Avalanche network is cross-chain compatible with Ethereum, which means that any token or project running on Ethereum can fully migrate to the Avalanche ecosystem and take advantage of its higher throughput and lower transaction costs.

With uncertainty about when Eth 2.0 will be fully operational and what its eventual capabilities will be, networks like Avalanche now have the opportunity to prove why they are the better choice, which could increase their market share.

Liquidity migration and rising TVL

The second reason for AVAX's constructive strength is the continuous transfer of assets from networks like Ethereum to Avalanche to participate in its growing decentralized finance (DeFi) ecosystem.

Evidence of asset transfers can be found in the Total Value Locked (TVL) data provided by Defi Llama, which shows that TVL on Avalanche has been climbing rapidly since August 19th and reached 2.17 billion on September 16th A new record for the dollar.

Total Value Locked on Avalanche Source: Defi Llama

The rise in TVL is largely due to the launch and growth of several successful decentralized finance protocols on Avalanche, including Benqi (QI), Trader Joe (Joe), and Pangolin (PNG).

Partnerships and crypto-related integrations

A third factor that helped boost AVAX's value was a series of partnership and integration announcements that excited investors and put the project in the spotlight.

The Avalanche NFT ecosystem has attracted a lot of interest thanks to a partnership with player card and memorabilia company Topps, which launched its “Inception” collection of NFT digital collectibles on the network.

The Aave community, one of the top DeFi protocols in the cryptocurrency ecosystem, is also voting to determine whether investors want AAVE to launch on the Avalanche network. Voting to pass may further increase the TVL on Avalanche, as AAVE assets held on Ethereum are likely to be migrated to Avalanche.

Aave proposal is live!

If you are part of the AAVE community and would like to see Aave deployed on Avalanche, please cast your vote now

— Avalanche (@avalancheavax) September 15, 2021

According to data from Cointelegraph Markets Pro, the market situation for AVAX has been favorable for some time.

The VORTECS™ Score is an algorithmic comparison provided exclusively by Cointelegraph that compares historical and current market conditions through data points such as market sentiment, trading volume, recent price action, and Twitter activity.

VORTECS™ Score (Green) vs. AVAX Price Source: Cointelegraph Markets Pro

As shown in the chart above, AVAX's VORTECS™ score surged to a high of 86 on September 13, and about 24 hours later the AVAX price rallied 40% over the next two days.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness. In view of the fact that China has not yet issued policies and regulations related to digital assets, users in mainland China are advised to be cautious in digital currency investment.