AVAX price collapsed to the lowest level in almost a month as bullish liquidations soared to the highest level since November 9. Avalanche’s coin plunged to a low of $11.90, which was about 18% below the highest level this month and 42% below November’s high.
AVAX liquidations continues
Avalanche is a leading blockchain network that provides infrastructure solutions to other developers. It is a third-generation layer 1 network that is significantly faster and cheaper than Ethereum.
Avalanche’s growth skyrocketed in 2021 as demand for clean, faster, and more efficient projects rose. It accelerated after the company launched Avalanche Rush, a $150 million incentive program for the network.
Avalanche has been used to build hundreds of decentralized projects in industries like Decentralized Finance (DeFi), Non-Fungible Tokens (NFT), and the metaverse. DeFi Llama identifies 277 DeFi projects that have a total value locked (TVL) of more than $1.7 billion.
Some of the best-known projects in the ecosystem are AAVE, Benqi, Trader Joe, and Stargate. At its peak, Avalanche had a TVL of over $22 billion.
AVAX price dropped during the weekend as the number of holders who liquidated their holdings jumped. According to CoinGlass, liquidations jumped to over $1.67 million on December 16, the lowest level in more than a month.
These liquidations happened as worries about the hawkish Federal Reserve spread in the financial market. In its decision last week, the Fed hinted that it will continue hiking rates in the coming months even as inflation continued easing. Data published on Tuesday showed that the headline consumer price index (CPI) dropped to 7.3% in November from the previous increase of 7.7%.
AVAX price has also dropped after the TVL in Avalanche’s ecosystem continued dropping. In addition, exchange outflows have remained at an elevated level recently.
Avalanche piece prediction
The 4H chart shows that the AVAX price has been in a strong bearish trend in the past few days. In this period, it remains below all moving averages. The coin has also formed a bearish flag pattern, which is usually a bearish sign. Therefore, there is a likelihood that the AVAX price will have a bearish breakout as sellers target the next key support level at $10. A move above the resistance at $13 will invalidate the bearish view.
