Highlights:
- Avalanche price on a rebound after a correction to $40.39
- Rebound triggered by buyers taking advantage of post-FOMC dip
- Avalanche’s recent upgrade could sustain momentum
Avalanche (AVAX), like the rest of the cryptocurrency market, is in the red today. At the time of going to press, Avalanche was trading at $43.23, down by 7.30% in the day. However, trading volumes for Avalanche, as is for most cryptocurrencies, are on the rise today. In the last 24 hours, Avalanche trading volumes have shot up by 65.07% to stand at $1.28 billion. This could mean that investors are actively trading, trying to take advantage of the current price dip.
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Market Dipped After FOMC
Yesterday, December 18, when the Fed cut interest rates, expectations were high that the market was going to rocket. However, Fed Chair Jerome Powell added comments to his statement noting that the Federal Reserve would not be adding Bitcoin to its reserves.
However, he also noted that whether the Trump administration wanted to create such a reserve is a prerogative of Congress, which could rekindle market momentum. This may explain the rising volumes for Avalanche and other top cryptocurrencies on a day when the market is in a minor correction.
Broader Cryptocurrency Market Trending Towards Support Lines
Avalanche price correction today also has a lot to do with the fact that Bitcoin is trending towards support lines. Bitcoin has been on a meteoric rise recently, hitting prices as high as $107,000. This rally was likely a front running of the expected 25 basis point cut by the Fed.
However, after the news, the price is correcting back to support around the $100k level. Since Bitcoin tends to drive the broader market along with it, Avalanche has experienced a correction as well and is finding its own support levels intra-day. If the support holds for Bitcoin, then the broader market could rally as well, and that includes Avalanche.
Avalanche’s Recent Upgrade a Boost for Its Value Growth
Outside of the broader market, a lot is happening within the Avalanche ecosystem itself that could help drive its value higher. Recently on December 17, the much-awaited Avalanche9000 upgrade went live. With this upgrade, Avalanche transaction costs went much lower. This is a big deal for Avalanche which already has some of the most competitive transaction fees among the top L1s.
The Avalanche C-Chain is the cheapest and most decentralized EVM out there, full stop. https://t.co/Br6uqNDuiB pic.twitter.com/Ly007FqKuz
— Luigi9000 🔺 (@luigidemeo) December 16, 2024
According to the Avalanche team, the new upgrade reduces the cost of deployment by 99.9%. This could trigger a parabolic increase in the projects launching on the Avalanche network. The result is that demand for the Avalanche token could be set to skyrocket. This is an important factor that could see Avalanche price rally back to its 2021 all-time highs, and potentially surpass it.
Imagine what’s coming.
With Avalanche9000 hitting mainnet, building in web3 just got a lot easier and a lot cheaper. Especially if you want to build your own blockchain with your own token and your own rules.
It’s now easier to bring web3 to art, institutions, gaming,… https://t.co/PwiSlExfhY
— Avalanche Arts & Culture 🔺9000 (@CultureOnAvax) December 16, 2024
Web 3 Explosion on Avalanche
A key driver to the demand that could be triggered by the Avalanche update is Web 3.0. That’s because, with the drastically reduced cost of launching an L1, it will become easier for L1s to build on Avalanche. This is especially the case for projects that want to build in a permissionless environment where they can have their own token and generate their own rules on how the token should run. Use cases such as web 3.0 gaming and NFTs could push Avalanche’s price to new highs soon.
Why L1s?
Different applications have different needs:
Games needs speed ✅
Institutions need customization and control ✅
DeFi needs lower fees and interoperability ✅
Only by launching your own Avalanche L1 can you have specialized infrastructure without the tradeoffs 🤝 pic.twitter.com/hBRhhZBA19
— Avalanche9000 🔺 (@avax) December 16, 2024
Technical Analysis – Avalanche Price in a Rebound as Bulls Buy the Dip
From the charts, Avalanche is on a rebound as bulls rush to buy the dip. This is evident in the fact that on the hourly chart, Avalanche is gaining strength after forming a Doji candle stick pattern earlier in the day.
It is an indicator that bulls are strengthening. If bulls sustain the current momentum, Avalanche price could test the $47.42 resistance in the day. A rally through this resistance could see AVAX retest $50 soon.
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