- Avalanche is one of the leading blockchains around.
- The coin has crashed by over 85% from its all-time high.
- Technicals suggest that the coin could crash by about 30%.
The Avalanche price is slowly staring at its lowest level since August 18 2021 as demand for the coin and DeFi protocols wane. AVAX is trading at $22.57, which means that the coin has crashed by more than 85% from its all-time high. As a result, its total market valuation has slipped to about $6 billion.
Why is AVAX crashing?
Avalanche is a blockchain project that hopes to become a home for developers who are working on decentralized applications (dApps) in all industries.
The network has been used to build applications in finance, gaming, non-fungible tokens (NFT), and the metaverse.
Developers love Avalanche for a number of reasons. First, the developers have provided millions of dollars in incentive fees. The first fund was known as Avalanche Rush while the second one was aimed at developers building metaverse projects.
Second, unlike Ethereum, Avalanche was built using the proof-of-stake technology from scratch. As a result, this makes it highly reliable and extremely faster than other networks since it can handle as many as 4,500 transactions per second (tps).
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Third, unlike Solana, Avalanche has been running continuously for almost two years without any downtime. At the same time, the network has been relatively safe, with no major hackings.
However, the Avalanche price has struggled lately for three main reasons. First, this decline coincides with the overall decline of other cryptocurrency prices like Bitcoin, Solana, and Ethereum. Second, the coin has crashed because of the ongoing fears of Fed’s monetary policy now that it has vowed to continue tightening rates.
Finally, the recent LUNA crash has had a negative impact on cryptocurrencies that have an exposure to Decentralized Finance. Investors are now afraid that their DeFi holdings can disappear within a second, which explains why Avalanche’s TVL has declined from over $10 billion to $4 billion.
Avalanche price prediction
AVAX price is hanging on a thread as the daily chart below shows. The coin is trading at $22, where it was earlier this month. This means that attempts to recover have faded and that sellers are prevailing. The coin’s downward trend is also being supported by the short and long-term moving averages.
Therefore, at this stage, the outlook of the Avalanche price is extremely bearish, with the next psychological level to watch being at $15. This means that the token could crash by about 30%.
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