- Avalanche price has been in a strong bearish trend.
- There are fears about key sectors like DeFi and NFTs.
Avalanche price has lost momentum in the past few months. The AVAX token has crashed to $23.75, which is close to its lowest level in May this year. This price is also close to its lowest level since August last year. It has fallen by more than 80% from its all-time high.
As a result, its market cap has crashed to $6.6 billion. It has also fallen in cryptocurrency ranking. According to CoinGecko, it is now the 15th biggest cryptocurrency in the world.
Why is AVAX falling?
Avalanche is a smart contract platform that enables developers to build decentralized applications in all industries like DeFi, metaverse, and NFT.
It is a proof-of-stake platform that is best known for its speed and lower cost of transactions. The network has been used to build many popular platforms such as Aave, TraderJoe, Wonderland, and BENQI. It has achieved this through its several initiatives such as Avalanche Rush.
The AVAX price has been falling for a number of reasons. First, like with Solana, the AVAX price has decline because of the overall sell-off of cryptocurrencies. This decline is mostly because of the falling demand for digital coins as interest rates rise.
Second, Avalanche price has declined because of the weak performance of its DeFi ecosystem. According to DeFi Llama, the platform has a total value locked (TVL) of more than $3.8 billion. This TVL has crashed from an all-time high of over $13.7 billion. A closer look at the DeFi platforms in the ecosystem shows that AAVE V3 has a dominance of 35%.
Third, AVAX has declined because of the recent crash of Terra and its ecosystem. Investors are fearful that other DeFi investments could also crash within a short period. Indeed, most of them have seen their investments evaporate in the past few months.
Avalanche price prediction
The daily chart shows that the AVAX price has been in a strong bearish trend in the past few months. The coin is hovering near the lowest level in months. It has formed a small descending triangle pattern and moved below the 25-day and 50-day moving averages. Therefore, the coin will likely have a major bearish breakout as bears target the key support at $15. This view will be validated if it manages to move below the support at $15.
