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AVAX price has dropped to an all-time low.
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DeFi volume declined to $1.7 billion from a record high of $20 billion.
Avalanche price has been in a strong sell-off in the past few months as demand for the AVAX token weakened. The token plunged to a low of $11.81, which was its all-time low. It has plunged by more than 91% from its highest level on record, giving it a market cap of more than $3.6 billion.
AVAX moves to record low
Avalanche is a leading blockchain that seeks to become the best alternative to Ethereum. It is a proof-of-stake network that is well-known for its blazingly fast speeds and low transaction costs. It also has more throughput features.
Avalanche has been adopted widely in key industries like decentralized finance (DeFi), gaming, the metaverse, and non-fungible tokens. Some of its top apps in its ecosystem are Benqi, Aave, and Trader Joe.
AVAX price has dropped recently as interest in tokens plummet following the spectacular collapse of leading platforms like Terra and FTX. As I wrote in this report, crypto investors have pulled more than $11 billion from Binance, the biggest exchange in the world.
Avalanche has also seen activity in its network crash. For example, the total value locked (TVL) in its DeFi apps has crashed from over $20 billion to just $1.7 billion. Most dApps in its ecosystem like Wonderland, Trader Joe, Stargate, and Platypus Finance have seen withdrawals.
Monetary policy also has had a role in the collapse of Avalanche prices. While America’s inflation dropped in November, it remained above the Fed’s target of 2.0%. As a result, the Federal Reserve decided to hike interest rates by 0.50% and signaled that it will continue hiking in the coming months.
This explains why cryptocurrencies and stocks have plunged after the Fed meeting while bond yields have risen sharply.
Avalanche price prediction
The daily chart shows that the AVAX price has been in a strong bearish trend in the past few months. As it dropped, the coin managed to move below the important support level at $13.65, which was the lowest level on June 19.
Avalanche also dropped below all moving averages while oscillators like the MACD and the Relative Strength Index (RSI) continued falling. Therefore, AVAX price will likely continue falling as the crypto bubble continues bursting. If this happens, the next key level to watch will be at $10. A recovery above $14 will invalidate the bearish view.