Avalanche (AVAX) has been experiencing a significant upswing, with its price rising 17% in the last week, marking a notable success. Currently, the cryptocurrency is valued at $28.12, having surged 7% in just the past 24 hours. This sudden rise is part of a broader recovery in the crypto market, influenced by a notable change in the US financial landscape: the Federal Reserve’s recent move to reduce interest rates.
On September 18, the Fed cut interest rates by 50 basis points, establishing a new range of 4.75%-5%. This decision aims to alleviate inflation and stimulate economic growth, marking the first rate decrease in four years.
While the cut was expected, it sparked volatility in both traditional and cryptocurrency markets; AVAX emerged as one of the standout performers. AVAX’s price outlook remains optimistic, as the cryptocurrency is trading 227% below future price expectations, indicating that a significant surge could be imminent.
DeFi Powerhouse In The Making
The current uptick in price is not solely due to macroeconomic factors. Avalanche is making significant progress in the decentralized finance (DeFi) sector, as evidenced by its increasing total value locked (TVL).
According to DeFiLlama, Avalanche’s TVL has risen from 28.1 million AVAX in Q1 to 30.8 million AVAX in Q2, reflecting an 11% increase in recent months. As of September 18, the total TVL across all protocols on the network is 38.63 million AVAX.
Assessing the adoption and liquidity within DeFi networks largely relies on TVL metrics. A higher TVL typically suggests that more participants are locking their assets into DeFi platforms, leading to increased price stability and long-term growth potential for AVAX.
AVAX Projections: Short-Term/Long-Term
Technical indicators for AVAX suggest a promising outlook. Backed by substantial accumulation and improving market sentiment, analysts project that the token could increase by 245% over the next three months. Expectations for six months down the line predict a gain of 180.19%, followed by a 166.37% rise within the next year.
As Avalanche gains traction in both the DeFi ecosystem and the broader cryptocurrency market, these predictions suggest a fruitful period ahead.
Fed’s Influence
While the recent interest rate decrease by the Federal Reserve has provided strong momentum for the market, some analysts believe that its impact may not be long-lasting. Although the sustainability of this upward trend remains uncertain, risk assets like cryptocurrencies tend to respond significantly to changes in interest rates. However, with around half of AVAX holders currently seeing profits, general investor sentiment is favorable.
All attention is focused on the token’s capability to break key resistance levels as Avalanche strengthens its foothold in the DeFi market. If current market conditions continue to remain positive, AVAX might be poised for both short-term and long-term growth.
Featured image from Pexels, chart from TradingView
