AVAX: price has a chance to double with US interest rate cut

The price of AVAX, the cryptocurrency that powers the Avalanche network, has entered a downward trend, mirroring broader market declines. These market movements have raised concerns about a possible bearish period in September, but several investors point out that a U.S. interest rate cut could reverse that trend.

AVAX has seen a notable drop in recent days amid broader financial instability. The cryptocurrency failed to break a critical resistance level, leading to a bearish trend.

Now, AVAX is ready to test the lower boundary of its current triangle trading pattern. If it manages to break out of this pattern, the cryptocurrency’s price could seek gains of over 100% and reach $50K.

Fed uncertainty drives AVAX declines

BitMEX co-founder Arthur Hayes shared a post on X explaining why he believes interest rate cuts could have zero effect on the market. Hayes highlighted BTC’s 10%+ drop last week, questioning the conventional wisdom that rate cuts bolster risky assets like cryptocurrencies.

Hayes pointed out that the reverse repurchase rate (RRP), which currently offers a yield of 5.3%, is more attractive than Treasuries with less than a year to maturity. This causes money market funds to prefer the RRP, thus reducing liquidity.

In line with this bearish outlook, AVAX’s price has also seen a decline, aligning with broader market trends. Hayes predicts that as long as Treasury bill rates remain below the RRP, current market dynamics will persist, with no prospect of further appreciation for cryptocurrencies.

In the past 24 hours, the price of AVAX has seen significant price fluctuations, falling by 1.99% to $22.12. However, the trading volume has increased by 53.62%, indicating increased trading activity.

The Moving Average Convergence Divergence (MACD) shows that the MACD line has recently crossed below the signal line. This suggests that a bearish move may continue in the near term.

This crossover, along with the MACD bars transitioning from green to red, further supports the potential continuation of the downtrend.

Interest rate cut could lead to 100% increase

According to data from Coinglass, trading activity has seen significant fluctuations recently, with volume increasing by 38% to $409 million. Despite this spike in trading volume, open interest saw a slight drop of 0.18% to $213 million.

This divergence indicates a dynamic shift in trader commitments and market liquidity. Therefore, such a dilemma shows that Avalanche price prediction is at a crucial point in its price trajectory, facing a significant resistance level of $25. Overcoming this barrier could push its value to $30.

Continuing this positive trend, the cryptocurrency could reach $40 by the end of September. AVAX could rise to $50 and reach over 100% growth if there is a new rally in the market.

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