The crypto market sentiment has been on the rise since the start of August, but as the month draws to a close, investors are more and more cautious.

Avalanche blockchain and their native token, AVAX, has weakened more than 30% since August 13, falling from a high of $30.30 to a low of $19.63. The current Avalanche (AVAX) price stands at $20.06, which is more than 75% off from its 2022 highs registered in April.

But where will Avalanche (AVAX) price go next, and what can we expect from September 2022?

Today, Crypto Lists will discuss Avalanche (AVAX) price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk and how much margin you got if trading with leverage.

FED will not pause its campaign to bring price growth down

Avalanche is a blockchain platform that allows you to build decentralized applications. Avalanche can process more than 4,000 transactions per second, and it is one of the fastest smart contracts platforms in the blockchain industry. Avalanche is fully compatible with Ethereum assets, apps, and tooling, and it is important to mention that if you decide to deploy smart contracts on Avalanche, it will cost you just a tenth of what they cost on Ethereum blockchain.

The popularity of Avalanche is growing, and its flexibility is positioning it as the best option for institutions, enterprises, and governments. Many projects already collaborate with Avalanche, and the most popular ones include Arweave, Aave, Bitfinex, Mastercard, Celer, Deloitte, Ankr, Binance, BitMart, Chainlink, Cartesi, Celer Network, Coinbase, Curve, Sushiswap, Huobi, and Nexo. Avalanche recently announced new support for Bitcoin through its bridge solution built on its crypto wallet Core. The official blog post stated:

Rating: 9.5/10
Supply: 118,780,000 / 200,000,000
Release date: August 1, 2014

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“This new Bitcoin bridging functionality aims to unlock over half a trillion dollars of value on the Bitcoin network for use within the Avalanche DeFi ecosystem, and further expand the set of offerings available on Avalanche. This enables Bitcoin holders to directly access extensive earning and yield opportunities on top DeFi protocols, while still maintaining BTC on their portfolio.”

AVAX is the native token of the Avalanche platform, and it is used to power transactions in its ecosystem. AVAX also serves as the means to distribute system rewards, participate in governance and facilitate transactions on the network by paying fees. Avalanche (AVAX) has weakened more than 30% since August 13, and the risk of further decline for AVAX is not over.

According to the latest survey, the crypto market sentiment plunged to a monthly low, which puts it dangerously close to falling back into the extreme fear territory. Federal Reserve Chair Jerome Powell said on Friday that the Federal Open Market Committee would not pause its campaign to bring price growth down, while Federal Reserve Bank of St. Louis President James Bullard said that he is open to the idea of another outsized interest-rate increase at the central bank’s meeting in September.

The Fed has raised its benchmark overnight interest rate by 225 basis points since March, and while the rate increases are intended to tame inflation and thus help the economy, investors are worried that an aggressive interest rate could tip the economy into recession. Risk-on assets tend to suffer in such conditions, and it is important to say that risky assets like stocks and cryptocurrencies have been considerably impacted by the U.S. central bank’s tightening monetary policy.

Technical analysis for Avalanche

After hitting recent highs above $30 on August 13, Avalanche (AVAX) has encountered losses of more than 30%. The price currently stands above $20, but a break below this level would indicate that AVAX could probably test the price level at $19.

On the chart below, I marked the trendline, and as long the price of Avalanche is below this trendline, we can’t talk about a trend reversal, and the price of AVAX remains in the SELL-ZONE.

Avax overall long term bearish trend

Main support & resistance levels for Avalanche

AXAX short term trends with support & resistance levels

On this chart (the period from January 2022), I marked the main support and resistance levels that can help traders to understand where the price could move. Avalanche (AVAX) remains in the “bearish phase, “but if the price advances above $40, it could be a sign of the trend reversal, and the next target could be located around $50. The current support level is $20, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $19. If the price drops below $15, which represents very strong support, the next target could be located around $10.

What speaks for the rise in the Avalanche price

Many surveys show that institutional investors still remain bearish on cryptocurrencies, and it is important to say that the bearish sentiment towards cryptocurrencies has not been relegated to just institutional investors alone. The spot markets are also feeling the heat as sell-offs have resumed, and in light of this, Avalanche (AVAX) might have a hard time holding above the $20 level.

Avalanche (AVAX) remains in the “bearish phase, “but if the price advances above $40, it could be a sign of the trend reversal, and the next target could be located around $50. Traders should also consider that the price of Avalanche is correlated with Bitcoin, and if the price of Bitcoin jumps above $25000, we can see AVAX at $30 or even $35.

What indicates further downfall for Avalanche

Economists have warned that a global recession could be on the horizon, and the consensus appears that the price of AVAX will drop even more. The price currently stands above $20, but if the price drops below $15, which represents very strong support, the next target could be located around $10. The price of Avalanche is correlated with the price of Bitcoin, and when the price of Bitcoin drops, that usually has a negative influence on the price of AVAX.

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Avalanche price expectations from analysts and experts

The cryptocurrency market continues to be bearish, following a considerable lack of demand in the market and the macro event. The crypto market sentiment plunged to a monthly low after Federal Reserve Chair Jerome Powell’s hawkish speech at the Jackson Hole conference in Wyoming, and for now, everything indicates that we could see new lows. Investors are worried that an aggressive interest rate could trigger another sell-off, and in light of this, Avalanche (AVAX) might have a hard time holding above the $20 level. Fund manager Peter Schiff said that a lack of institutional support, a strict monetary policy, and a lack of events around the first cryptocurrency are inalienable parts of the bear market, which will still go on for quite some time, according to the current macro environment. On the other hand, analyst Michaël van de Poppe advises investors to purchase cryptocurrencies now as the current prices represent a good entry point.

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