Avalanche's 0.37% Price Increase to $9.89: Key Insights for September 5, 2023

Avalanche's AVAX token saw a slight 0.37% price increase over the past 24 hours to $9.89 according to data from September 5, 2023. While not a large daily movement, this continues the token's gradual recovery over the past month. After falling to new lows below $8 in mid-August, AVAX has rebounded nearly 25% off those lows. However, the token remains far below its all-time high above $140 set in November 2021.

Looking at the key metrics provided, AVAX's 24-hour trading volume came in at $60.64 million. This represents a decrease from the previous few days but is still well above the average daily volume seen in July and August. The 1-hour change was slightly positive at +0.29% hinting at some potential near-term bullish momentum. However, zooming out further shows AVAX continuing to struggle over the past week (-4.83%), month (-19.58%), and 6 months (-38.82%).

What's Behind the Recent Upswing for AVAX?

The broader cryptocurrency market has shown signs of recovery over the past 3-4 weeks after a painful summer slump. While still early, AVAX's price rebound aligning with this broader market move hints that it may be starting to find a bottom.

Additionally, Avalanche and the AVAX community have continued rolling out upgrades, integrations, and developments that could be contributing to renewed interest. For example, Avalanche Rush - a $180 million incentive program to attract new dApps and users to the platform - officially launched in mid-August. The ongoing upgrades related to scalability and convenience have also likely improved sentiment.

Macroeconomic factors including lower inflation readings and hopes of less aggressive Fed rate hikes have also boosted crypto assets recently. The high-beta nature of cryptocurrencies means they tend to outperform on the way up and underperform on declines. This dynamic appears to be playing out over the past month.

What's Ahead for Avalanche in 2023 and Beyond?

While the recent price action is encouraging, AVAX remains in a clear downtrend on larger time frames. Strong overhead resistance is expected between $15-20 if the rally continues. It would likely take a breakout above the key $20 level for traders to call an end to the bear market.

Fundamentally, the ongoing development of Avalanche's blockchain technology continues to be promising. However, the crypto industry still faces macro headwinds including regulatory uncertainty and customers tightening budgets during the economic slowdown.

My prediction is that AVAX will likely trade choppily between $7 and $15 over the next 3-6 months. This would match the overall consolidation trend seen across the crypto markets so far in 2022. While brief rallies up to $20 are possible, major resistance is expected at that level until macro conditions improve.

Looking out to 2024 and beyond, I expect AVAX will eventually break out to new highs above the $140 all-time high. But patience is warranted through likely ongoing volatility over the next 12-18 months. The long-term growth trajectory for Avalanche remains very strong given its innovative platform, strong leadership team, and growing ecosystem of applications.

How Can You Profit from AVAX's Price Volatility?

With AVAX showing large price swings between $7 and $20 year-to-date, what's the best way to trade or invest in this volatility?

For short-term traders, buying on support around $7 and selling into resistance near $15 is one strategy. AVAX's high beta means it will often outperform peers during broader upside momentum.

Long-term cryptocurrency investors may want to dollar cost average into positions to reduce timing risks. For those with a multi-year time horizon, staking AVAX tokens to earn yield through validation rewards also warrants consideration.

Is Now the Time to Buy AVAX Despite Ongoing Uncertainty?

With AVAX still trading 75% below its all-time high, is now a good opportunity to buy the dip even amidst the uncertain macro environment?

Dollar cost averaging can help mitigate timing risks for long-term investors. The ongoing platform development also supports the bull case long term. However, further volatility including potential retests of the $7 support level are likely. Maintaining some cash to add on dips can capitalize on price weakness as the macro outlook evolves over the next 6-12 months.

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