With its price up 17% over the past seven days, Avalanche (AVAX) has recently been in winning streakThe cryptocurrency is currently trading at $28.12, up 7% in the past 24 hours alone. This sudden surge fits into a larger cryptocurrency market rally driven by a major shift in the US financial landscape: the Federal Reserve’s decision to cut interest rates.
The Federal Reserve cut interest rates by 50 basis points on September 18, setting the new range at 4.75% – 5%. Aimed at helping to lower inflation and boost economic growth, the Fed’s rate cut was the first in four years.
Although the cut was expected, it still caused volatility in both traditional and crypto markets, with AVAX emerging as one of the best performers. The AVAX price forecast remains very positive at the same time. With the cryptocurrency selling for 227% below its expected price forecast for the next month, a significant drop in its price could lead to significant market volatility. The rise may be near.
DeFi power is under construction
The current price surge goes beyond macroeconomic considerations. As it continues to grow its total value locked (TVL), Avalanche is also making great strides in the decentralized finance (DeFi) space.
From 28.1 million AVAX in Q1 to 30.8 million AVAX in Q2, Avalanche’s TVL has increased by 11% in recent months, according to data from DeFiLlama. The TVL across all protocols on the network as of September 18 was 38.63 million AVAX.
TVL is crucial to assessing the appetite and liquidity within DeFi networks. A higher TVL typically indicates that more people are staking assets in DeFi systems, which translates into increased price stability and long-term expansion for AVAX.
AVAX Forecast: Short Term/Long Term
Technical indicators for AVAX point to a bright future. Backed by the massive accumulation and improving market sentiment, analysts expect the coin to rise by 245% in the next three months. It is expected to rise by 180.19% six months from now; and over the next year, it will rise by 166.37%.
As Avalanche gains more traction in the DeFi ecosystem and the larger crypto market, these predictions underscore productive months ahead.
Federal Reserve Effect
Although the Fed’s rate cut has given the market a boost, some experts believe its impact may be fleeting. While the longevity of this rally is not yet known, risky assets like cryptocurrencies react significantly to changes in interest rates. But with about half of AVAX’s holdings currently in profit, investors are generally positive.
All eyes are on the token’s ability to break important resistance levels as Avalanche gains momentum in the DeFi market. If the market sentiment remains positive, AVAX could be on its way to growth in both the long and short term.
Featured image by Pexels, chart by TradingView