Avalanche's AVAX token looks poised to striking $80, as per a classic technical pattern, subsequently striking a new high of over $65 on Sept. 12.

Dubbed equally a "bull flag," the structure emerges as a cursory sideways/downward trend following a strong cost move higher. Equally a result, bull flags tend to look like downward sloping channels, represented past two parallel trendlines that trap the price action.

Additionally, a market's underlying trade volume dries up as prices motility lower, indicating weakness in the downtrend. Therefore, bull flags typically resolve post-obit a break in a higher place their upper trendlines, with prices pushing as high as the previous uptrend's top — i.e., "flagpole."

AVAX's price activeness since Aug. 17 has apprehensively led to the cosmos of a bull flag pattern.

AVAX/USD daily price chart featuring balderdash flag. Source: TradingView

The nautical chart to a higher place shows the construction's fruition, correct from the $37-long uptrend (flagpole) to a downward sloping channel's germination to an upside breakout. Every bit a result, AVAX now looks to be targetting $lxxx.

That is primarily because of a balderdash flag's popular turn a profit targets; analysts expect for the toll to break higher with a length equal to the flagpole's size. Therefore, measuring from the breakout level ($45.64), the AVAX profit target comes to be around $82.

AVAX/USD daily cost chart featuring bull flag profit target. Source: TradingView

The setup appeared as the Avalanche token reached another tape price level, hit $66.47 for the start fourth dimension, following a 618% rebound rally from its July 20 low of $ix.25. Meanwhile, on a year-to-date timeframe, its gains are an astonishing one,988%.

DeFi and NFT boom behind soaring AVAX

The rally in AVAX markets closely followed similar moves beyond tokens from smart contracts platforms that rival Ethereum, the leading public ledger backside the booming decentralized finance (DeFi) and nonfungible token (NFT) space.

But Ethereum's reign as the pinnacle smart contract protocol has come under challenge due to its expensive transaction costs and network congestion issues. Every bit a issue, the market has made space for so-called "Ethereum killers" like Solana, Cardano, Fantom, Avalanche and others.

For example, the full value locked (TVL) inside the Solana ecosystem has jumped by 165% in the past seven days, according to DeFi Llama, while SOL/USD has jumped past over 42% in the same timeframe.

Similarly, Fantom'southward TVL has soared 12.73%, with FTM/USD substitution rates rising by 39% in the last seven days. Every bit for Avalanche, the TVL has spiked 0.five%, and AVAX/USD has risen by 41.10%.

Blockchains and their TVL performances. Source: DeFi Llama

In contrast, Ethereum's TVL has declined by 22.69%, signaling liquidity migration to rivaling chains.

AVAX/USD started rallying especially after the Avalanche Foundation launched its namesake DeFi incentive plan on Aug. 18. The organization allocated $180 million to DeFi protocols that want to drift from Ethereum to Barrage.

Related: Barrage Rush to give out more than 180M in DeFi incentives

Benqi, a decentralized non-custodial liquidity market protocol built atop Avalanche, received $3 million from the foundation'due south grant.

Benqi is the leading DApp by TVL in the Avalanche ecosystem. Source: DeFi Llama

Avalanche also witnessed growth in the NFT and DeFi projects looking to run atop its public ledger. That included a partnership with Topps, a collectible and trading carte maker that employed the Avalanche blockchain to launch its "2021 Topps Major League Baseball Inception NFT Collection."

All the same, Ethereum remains the dominant force in the smart contract space. The project is undergoing major network upgrades to resolve its scalability and network fees issues by completely updating its cadre proof-of-work protocol to proof-of-stake by next year.

The views and opinions expressed hither are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your ain research when making a conclusion.