Over the last three months, there has been a significant decline in Avalanche’s price due to decreased demand for cryptocurrencies. On March 18th, the AVAX token reached its peak at $65.38, but it has since plummeted by over 60% to its current value of $26.8.
This marks its lowest point since December 2023, positioning it as one of the poorest-performing major coins this year.
Is spot Avalanche ETF coming?
The major event in the world of cryptocurrency this year was the Securities and Exchange Commission (SEC)’s approval of 11 spot Bitcoin ETFs in January. These funds have performed well, attracting over $14 billion in investments.
Meanwhile, investors are eagerly anticipating the SEC’s decision on the approval of Ethereum ETFs, which could happen as early as this week. The agency is expected to then begin evaluating ETFs based on Solana, one of the leading layer 1 networks in the industry.
If a Solana fund is given the green light, several companies will likely seek approval for an Avalanche ETF. Both Solana and Avalanche are similar networks that serve as layer-1 networks for developing high-quality decentralized applications (dApps) in the DeFi and other sectors.
Avalanche is sufficiently large and liquid to support a spot ETF, with a market cap of over $10.5 billion and a daily trading volume exceeding $400 million.
Nevertheless, it remains uncertain whether investing in a spot Avalanche ETF would be wise, as similar to Ethereum, users would solely benefit from price movements while foregoing the 7.8% staking reward provided by the network. Additionally, they would incur an annual fee.
Avalanche price chart analysis
Turning to the daily chart, we see that the AVAX price is not doing well. It has crashed from the year-to-date high of $65.38 to the current $26.57. The token formed a head and shoulders pattern and has now dropped below the neckline at $29.87.
Most importantly, it has formed a death cross as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. The Relative Strength Index (RSI) and the MACD have stabilized.
Therefore, the Avalanche price will likely have a bearish breakout as sellers target the key support level at $20.
