Over the past seven days, Avalanche (AVAX) has been on an impressive winning streak, with its price climbing by 17%. Currently, the cryptocurrency is trading at $28.12, marking a 7% increase in the past 24 hours alone. This sudden rise is part of a broader recovery in the crypto market, largely influenced by a significant shift in the U.S. financial landscape: the Federal Reserve’s decision to lower interest rates.
Federal Reserve’s Rate Cut
On September 18, the Federal Reserve lowered interest rates by 50 basis points, setting the new range at 4.75%-5%. This move aimed to help reduce inflation and spur economic growth marks the first rate cut in four years. Although the rate cut was anticipated, it still caused volatility in both traditional and cryptocurrency markets. Among the top performers, AVAX has shown remarkable resilience.
The price outlook for AVAX remains optimistic. Despite the current surge, the cryptocurrency is trading 227% below projected price levels for next month, suggesting that a significant upward movement could be imminent.
DeFi Powerhouse In The Making
The recent price increase of Avalanche goes beyond macroeconomic factors. The platform is making substantial progress in the decentralized finance (DeFi) sector by continually increasing its total value locked (TVL). According to data from DeFiLlama, Avalanche’s TVL climbed from 28.1 million AVAX in Q1 to 30.8 million AVAX in Q2, marking an 11% increase in recent months. As of September 18, the TVL across all protocols on the network stood at 38.63 million AVAX.
TVL is a critical metric for assessing adoption and liquidity within DeFi networks. A higher TVL generally indicates that more individuals are locking assets into DeFi systems, which translates to increased price stability and long-term growth for AVAX.
AVAX Projections: Short-Term/Long-Term
Technical indicators suggest a promising future for AVAX. Supported by significant accumulation and improving market sentiment, analysts predict that the token could rise by 245% over the next three months. A 180.19% gain is expected six months from now, followed by a 166.37% increase over the next year.
As Avalanche gains more traction in both its DeFi ecosystem and the broader crypto market, these projections indicate a productive period ahead.
Fed’s Influence
While the Federal Reserve’s rate decrease has provided a significant boost to the market, some experts believe its impact may be short-lived. The longevity of this surge remains uncertain, but risk assets like cryptocurrencies generally react strongly to changes in interest rates. However, with about half of AVAX holdings currently in profit, investor sentiment remains optimistic.
As Avalanche continues to gain momentum in the DeFi market, all eyes are on the token’s ability to break through key resistance levels. If the market conditions remain favorable, AVAX could be on the path to both short-term and long-term growth.
