FED’s Commitment to its Inflation-Control Measures

Avalanche is a blockchain platform that enables the development of decentralized applications. With a processing speed of over 4,000 transactions per second, Avalanche ranks as one of the fastest smart contract platforms in the industry. It is fully compatible with Ethereum’s assets, apps, and tools. Notably, deploying smart contracts on Avalanche costs only a tenth of what it would on the Ethereum blockchain.

The growing popularity of Avalanche and its flexibility are making it an attractive option for institutions, enterprises, and government bodies. Several well-known projects are already collaborating with Avalanche, including Arweave, Aave, Bitfinex, Mastercard, Celer, Deloitte, Ankr, Binance, BitMart, Chainlink, Cartesi, Celer Network, Coinbase, Curve, Sushiswap, Huobi, and Nexo. Avalanche has recently introduced support for Bitcoin via its bridge solution, integrated into its crypto wallet, Core. According to the official blog post:

“This new Bitcoin bridging functionality aims to unlock over half a trillion dollars of value on the Bitcoin network for use within the Avalanche DeFi ecosystem, while also expanding the range of offerings available on Avalanche. This allows Bitcoin holders to directly access yield opportunities on top DeFi protocols while keeping BTC in their portfolios.”

AVAX, the native token of the Avalanche platform, is used to power transactions within the network. It is also utilized to distribute system rewards, participate in governance, and facilitate transaction fees. However, Avalanche (AVAX) has dropped more than 30% since August 13, and the possibility of further declines for AVAX is still present.

According to recent surveys, the crypto market sentiment has dropped to a monthly low, bringing it dangerously close to extreme fear territory. Federal Reserve Chair Jerome Powell stated on Friday that the Federal Open Market Committee would not pause its efforts to curb price growth, and Federal Reserve Bank of St. Louis President James Bullard mentioned that he is open to another large interest rate hike in the central bank’s September meeting.

Since March, the Fed has raised its key overnight interest rate by 225 basis points. These hikes are intended to control inflation and stabilize the economy, but investors are concerned that aggressive interest rate increases could push the economy into a recession. Risk assets like stocks and cryptocurrencies have been hit hard by the tightening of monetary policy.

Technical Overview of Avalanche

Following recent highs above $30 on August 13, Avalanche (AVAX) has faced a decline of more than 30%. The current price is above $20, but a drop below this level could indicate that AVAX may test the $19 price point.

In the chart below, I have marked the trendline, and as long as Avalanche’s price remains below this trendline, it is not a sign of trend reversal. The price of AVAX remains in the SELL zone.

Key Support & Resistance Levels for Avalanche

The chart from January 2022 marks the primary support and resistance levels to assist traders in understanding price movements. Avalanche (AVAX) remains in the “bearish phase,” but if the price rises above $40, it may indicate a trend reversal, with the next target at around $50. The current support level is $20, and a break below this level would signal a “SELL” and possibly lead to a drop to $19. If the price falls below $15, a strong support level, the next target could be around $10.

Indicators Supporting a Rise in Avalanche Price

Surveys show that institutional investors remain bearish on cryptocurrencies, and it is important to note that this sentiment extends beyond institutions, affecting spot markets as well. Avalanche (AVAX) might struggle to stay above the $20 level as sell-offs continue. However, if the price of AVAX rises above $40, it could signal a trend reversal, and the next target would be near $50. Traders should also consider that the price of AVAX is often correlated with Bitcoin. If Bitcoin’s price rises above $25,000, we might see AVAX move to $30 or even $35.

Signs Suggesting Further Decline for Avalanche

Economists warn that a global recession may be on the horizon, and the consensus suggests that the price of AVAX will likely drop further. Currently priced above $20, if AVAX falls below $15, a strong support level, the next target could be $10. As the price of Avalanche is linked to Bitcoin’s price, a drop in Bitcoin’s value typically results in a negative impact on AVAX’s price.

Price Predictions for Avalanche from Experts and Analysts

The crypto market continues to experience a bearish phase, primarily due to weak demand and macroeconomic events. After Federal Reserve Chair Jerome Powell’s hawkish comments at the Jackson Hole conference, the crypto sentiment plunged to a monthly low, indicating the potential for new lows. Investors are concerned that aggressive interest rate hikes could lead to another sell-off, making it difficult for Avalanche (AVAX) to maintain a price above $20. Fund manager Peter Schiff suggests that the bear market will persist due to a lack of institutional support, strict monetary policies, and the absence of significant events in the cryptocurrency space. Conversely, analyst Micha?l van de Poppe advises that current prices present a good entry point for purchasing cryptocurrencies.