With its price climbing 17% over the past seven days, Avalanche (AVAX) has lately been on a winning run. Right now, the cryptocurrency is trading at $28.12, up 7% over the past 24 hours alone. This abrupt increase fits a larger recovery across the crypto market driven by a significant shift in the US financial scene: the Federal Reserve’s decision to lower interest rates.
The Fed lowered interest rates by 50 basis points on September 18, therefore defining the new range as 4.75%-5%. Aimed at helping to lower inflation and increase economic development, the Fed’s decision to drop rates is the first one in four years.
Although the cut was anticipated, it nonetheless caused volatility in both conventional and cryptocurrency markets; AVAX turned up as one of the best performers. AVAX’s price projection is still quite positive meantime. With the cryptocurrency selling 227% below projected price projections for next month, a major surge could be just around the corner.
DeFi Powerhouse In The Making
The current price increase goes beyond simply macroeconomic considerations. As it keeps increasing its total value locked (TVL), Avalanche is also making great strides in the decentralize finance (DeFi) department.
From 28.1 million AVAX in Q1 to 30.8 million AVAX in Q2, Avalanche’s TVL has climbed by 11% in recent months, data from DeFiLlama shows. The TVL across all protocols on the network as of September 18 stood at 38.63 million AVAX.
Evaluating uptake and liquidity inside DeFi networks depends critically on TVL. Higher TVL usually indicates that more people are locking assets into DeFi systems, which would translate for increased pricing stability and long-term expansion for AVAX.
AVAX Projections: Short-Term/Long-Term
Technical indicators of AVAX point to a bright future. Supported by significant accumulation and improving market sentiment, analysts estimate the token might climb by 245% in the next three months. Six months from now, a 180.19% gain is expected; over the next year, a 166.37% rise follows.
As Avalanche gets greater traction in both its DeFi environment and the larger crypto market, these forecasts confirm a productive months ahead.
Fed’s Influence
Although the rate decrease by the Federal Reserve has given the market great momentum, some experts think that its influence might be fleeting. Though the longevity of this surge is yet unknown, risk assets like cryptocurrencies generally react significantly to changes in interest rates. But given about half of AVAX holdings are currently in profit, investor attitude is generally positive.
All eyes are on the token’s ability to shatter important resistance levels as Avalanche gains traction in the DeFi market. Should the state of the market remain positive, AVAX may be en route to both long-term and short term growth.
Featured image from Pexels, chart from TradingView