Updated: Tuesday, 24 September 2024 08:19
Avalanche (AVAX) has experienced a significant decline since March 18, 2024, dropping from $65.38 to as low as $21.84. The current price of AVAX stands at $25.32, and traders should be mindful that the risk of further downturn remains.
Analysts are concerned that if Bitcoin falls below $55,000, it could spark a larger sell-off, making it harder for AVAX to maintain its current price. Meanwhile, the broader macroeconomic environment remains uncertain, as central banks continue to keep interest rates high, which could negatively impact risk-on assets like cryptocurrencies.
What lies ahead for the price of Avalanche (AVAX), and what can we expect for the rest of 2024?
Today, CryptoChipy will dive into AVAX price projections from both a technical and fundamental perspective. Keep in mind that other factors such as your time horizon, risk appetite, and margin use in leveraged trading should also be considered before making any trades.
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1 Avalanche as a Platform for Decentralized Applications
2 Bearish Market Trends Persist
3 Technical Outlook for Avalanche (AVAX)
4 Key Support & Resistance Levels for Avalanche (AVAX)
5 Factors Driving Potential Growth for Avalanche (AVAX)
6 Potential Risks for Avalanche (AVAX) Decline
7 Expert Opinions on Avalanche (AVAX)
Avalanche as a Platform for Decentralized Applications
Avalanche is a blockchain platform designed for creating decentralized applications (dApps). It was developed to overcome the limitations faced by previous blockchain platforms like Bitcoin and Ethereum, particularly regarding transaction speed, scalability, and consensus mechanisms. Avalanche is capable of processing over 4,000 transactions per second, making it one of the fastest smart contract platforms available.
The platform allows for the creation of custom blockchain networks, or subnets, that can have unique rules and virtual machines. This flexibility makes Avalanche attractive to developers who want to create tailored solutions while still benefiting from the platform’s security and consensus features. Avalanche’s growing popularity and versatility are positioning it as a leading choice for institutions and enterprises looking to build on blockchain technology.
Like many cryptocurrencies, Avalanche (AVAX) has been under pressure following Bitcoin’s decline below $60,000. The overall cryptocurrency market capitalization has dropped, which has not been favorable for AVAX. In the last 24 hours, the market capitalization decreased by 3.2%, currently standing at $2.15 trillion. However, the drop in AVAX’s price is not just due to the market trend but also reflects a significant decrease in large trades involving AVAX.
Large trades contribute to liquidity, and a drop in such transactions can reduce liquidity, making it harder for traders to buy or sell large amounts of AVAX without influencing the market price. Reduced liquidity makes the market more prone to price fluctuations, and smaller trades may have a bigger impact on AVAX’s price.
A decline in large trades may also indicate diminishing confidence among big holders or institutional investors, which could harm market sentiment and possibly lead to further drops in AVAX’s price.
Bearish Market Trends Persist
July has been a challenging month for Bitcoin, AVAX, and the wider cryptocurrency market due to a series of unsettling events. The anticipated launch of Spot Ethereum ETFs on July 2nd didn’t happen, and reports indicate that large amounts of Bitcoin have been sold by the US and German governments. Despite these setbacks, some analysts speculate that a shift in market momentum could occur following the release of CPI data on July 11.
If inflation data shows a decline, it could trigger a rate cut from the Federal Reserve, which has historically been positive for the crypto market, including AVAX. Positive news also emerged from Bitfinex analysts, who reported that Bitcoin likely reached a local bottom after experiencing a massive sell-off.
AVAX’s fundamentals are heavily tied to the overall crypto market, especially Bitcoin. If Bitcoin rises above the $65,000 resistance level again, AVAX could see price improvements. Additionally, the expanding use of decentralized applications (dApps), DeFi projects, and NFTs on Avalanche could contribute to upward price pressure.
Avalanche’s high throughput, low latency, and strong interoperability make it a top choice for developers, and its active community continues to drive growth. Partnerships with major blockchain projects further enhance Avalanche’s credibility, which could attract more investment and capital inflows.
Technical Outlook for Avalanche (AVAX)
Since March 18, 2024, Avalanche (AVAX) has dropped from $65.38 to $21.84. The current price of $25.32 reflects a continued downtrend, which can be attributed to negative shifts in market sentiment. As long as AVAX remains below the resistance level shown on the chart, the risk of further price declines persists.
Key Support & Resistance Levels for Avalanche (AVAX)
In the chart for January 2024, I’ve identified key support and resistance levels that can guide traders. Although AVAX has dropped from its recent highs, if the price moves above $35, the next resistance level is $40. The strong support level for AVAX is $20. If the price breaks this level, it would signal a potential sell-off, and the next support level could be $15.
Factors Driving Potential Growth for Avalanche (AVAX)
Market sentiment is a significant factor in influencing AVAX’s price, but positive news, strategic partnerships, and developments on the Avalanche platform can attract traders and investors, pushing the price higher. Crypto whales’ activities often impact market sentiment, and an increase in large transactions for AVAX could act as a bullish signal. If whales make substantial buys, it could encourage other investors to follow suit. For AVAX to gain momentum, a rise above $40 would be crucial.
Potential Risks for Avalanche (AVAX) Decline
Avalanche (AVAX) is known for its volatility and presents risks for investors. The uncertain macroeconomic environment, with high interest rates from central banks, may continue to pressure risk assets like cryptocurrencies. The crucial support level for AVAX is $20, and if the price falls below this, it could signal further downside, with the next support level at $15.
Expert Opinions on Avalanche (AVAX)
Avalanche’s popularity is growing in 2024, with major collaborations between traditional financial institutions like JPMorgan and Citi. However, analysts caution that if Bitcoin falls below $55,000, it could trigger a broader sell-off, making it harder for AVAX to hold its current price. There has also been a significant decrease in whale transactions involving AVAX in recent weeks. When whales reduce their trading activity, it often indicates a lack of confidence in the coin’s short-term prospects. This could result in further price declines for AVAX.
Disclaimer: Crypto investments are highly volatile and may not be suitable for all investors. Never invest money that you cannot afford to lose. The information provided is for educational purposes only and should not be interpreted as investment advice.
by Our Certified Author Stanko
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