Avalanche price collapsed to the lowest level on record as challenges in the crypto industry continued. AVAX dropped to a low of $11.78, which was about 42% below the highest level this month. Its market cap has dropped to about $3.5 billion.
Is AVAX a good buy?
Avalanche is a leading blockchain project that makes it possible for developers to build decentralized applications (dApps).
It is known for its blazingly fast speeds and low transaction costs. It can handle a transaction finality of less than 2 seconds and it uses a proof-of-stake (PoS) technology.
Avalanche has been used to build some of the best-known apps in the industry like Aave, Aleph, Trader Joe, Wonderland, and Benqi among others.
Like other cryptocurrencies, AVAX price has come under intense pressure in the past few days because of the collapse of FTX. Investors are simply fearful about contagion risks in the crypto industry.
FTX collapsed after a bank run happened in its exchange. The bank run happened after a report showed the close relationship between Alameda and FTX. According to its balance sheet, Alameda held FTT tokens worth billions of dollars.
Avalanche price also declined because Trader Joe, a DEX in its ecosystem, was a recipient of FTX’s cash. FTX took part in a fundraising by Joepegs, an NFT platform built by TradeJoe. The funding by FTX was completed in June.
Joepegs has then grown to become the biggest NFT platform in Avalanche with over 12,000 users and $3.4 million in secondary sales. Therefore, there are concerns about Avalanche’s more entanglements with FTX.
Trader Joe has seen its total value locked crash by over 30% in the past 30 days. In total, Avalanche’s TVL has dropped from over $22 billion in 2021 to about $1.9 billion.
Avalanche price prediction
AVAX/USD chart by TradingView
The four-hour chart shows that the AVAX price has been in a strong bearish trend in the past few days. It managed to move below the important support level at $12, which was the lowest level on November 14 and November 9.
The coin has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) moved below the oversold level. Therefore, by moving below the support at $12, there is a likelihood that the coin will continue falling as sellers target the next key support at $10.
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