- AVAX price has stalled because of the rising worries about the Fed.
- Avalanche's fundamentals have waned as daily active users have retreated.
Avalanche crypto price has lost its bullish momentum in the past few days as investors have embraced a risk-off sentiment. After peaking at $22.81 on February 2, AVAX/USD has retreated back to about $20. This decline has happened amid weakening fundamentals and rising concerns about the Federal Reserve.
Avalanche mixed fundamentals
The main reason for the recent AVAX price is known well. It has declined because of the rising hopes that the Federal Reserve will maintain its hawkish tone after the strong jobs numbers. According to the Labor Department, the unemployment rate dropped to 3.4% in January as the economy added over 500k jobs.
In the aftermath, most Fed officials have committed to hike and maintaining interest rates at an elevated level for a while. In most periods, as we saw in 2022, cryptocurrencies and stocks tend to underperform in a period of high interest rates.
Beneath the surface, Avalanche’s fundamentals are not doing well either. For example, in dollar terms, the total value locked (TVL) in its DeFi ecosystem has risen to over $2.2 billion. However, in AVAX terms, the TVL has slumped to A112 million, the lowest level since October 2021.
Read more about how to buy Avalanche.
Avalanche’s NFT space is not as popular as other chains like Ethereum, Immutable X, and Solana. In January, the network handled NFTs worth over $1.4 million. Month-to-date, the network has processed NFTs valued at just $357k. At its peak in February 2022, Avalanche was handling NFTs worth over $80 million.
Further, data compiled by TokenTerminal shows that the number of daily active users in the past 180 days has plunged to the lowest level during the period. It now has about 23k daily users, down from its high of almost 70k. As a result, fees paid in Avalanche have declined from their January highs.
Avalanche crypto price forecast
The 4H chart shows that the AVAX price has drifted downwards in the past few days. As this happened, the coin moved slightly below the 23.6% Fibonacci Retracement level. It has also declined below the 25-period and 50-period moving averages. Avalanche has moved below the ascending channel and formed a head and shoulders pattern.
Therefore, I suspect that the coin will continue falling as sellers target the 50% Fibonacci Retracement level at $16.70, which is about 15% below the current level.
