With its price rising 17% in the past seven days, Avalanche (AVAX) has recently been on the rise a victorious race. The cryptocurrency is currently trading at $28.12, up 7% in the last 24 hours alone. This sharp rise is part of a larger recovery across the crypto market, driven by a significant shift in the U.S. financial landscape: the Federal Reserve’s decision to cut interest rates.
The Fed lowered interest rates by 50 basis points on September 18, setting the new range at 4.75%-5%. Aiming to help reduce inflation and boost economic growth, the Fed’s decision to cut rates is its first in four years.
Although the halving was anticipated, it caused volatility in both conventional and crypto markets; AVAX was one of the best performers. The price projection for AVAX is still quite positive. With the cryptocurrency trading 227% below the price projections projected for the next month, a big the wave may be just around the corner.
DeFi power in the making
The current price surge goes beyond simply macroeconomic considerations. As it continues to increase its total value locked (TVL), Avalanche is also making major strides in the decentralized finance (DeFi) department.
From 28.1 million AVAX in Q1 to 30.8 million AVAX in Q2, Avalanche’s TVL has increased by 11% in the past few months, data from DeFiLlama shows. The TVL across all protocols on the network as of September 18 was 38.63 million AVAX.
Assessing absorption and liquidity within DeFi networks is fundamentally dependent on TVL. A higher TVL generally indicates that more people are locking assets into DeFi systems, which would translate into greater price stability and long-term expansion for AVAX.
AVAX Projections: Short/Long Term
AVAX’s technical indicators point to a bright future. Backed by significant accumulation and improving market sentiment, analysts estimate that the token could surge by 245% in the next three months. Six months from now, a gain of 180.19% is expected; the following year, a rise of 166.37%.
As Avalanche gains greater traction both in its DeFi environment and in the larger crypto market, these predictions confirm productive months ahead.
Fed Influence
While the Federal Reserve’s rate cut has given the market a big boost, some experts believe its impact may be short-lived. While the longevity of the hike is still unknown, risk assets like cryptocurrencies typically react significantly to interest rate changes. But given that about half of AVAX’s holdings are currently profitable, investor sentiment is generally positive.
All eyes are on the token’s ability to break key resistance levels as Avalanche gains traction in the DeFi market. If the market situation remains positive, AVAX could be on track for both long-term and short-term growth.
Featured image from Pexels, chart from TradingView
