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Highlights
- If AVAX price is to react the same way BTC and ETH post-ETF, it would rise to $440 and $231, respectively.
- AVAX is among the crypto assets in the Grayscale Digital Large Cap Fund, which shall be converted into an ETF.
- Avalanche price performance was lackluster following the announcement and dropped 2.6%.
AVAX price has been trending in the news since the beginning of the week. The potential approval of an Avalanche (AVAX) ETF has sparked excitement among investors, as the blockchain’s rapidly growing ecosystem attracts attention. Recent developments, including the assets inclusion in the Grayscale Digital Large Cap Fund, hint at ETF possibilities. Although not exclusive, this move marks significant progress for the cryptocurrency, which could see a surge in visibility and price. How high could AVAX go if an ETF is approved?
The Avalanche price is trading at $27.75, down 2.6% in the last 24 hours. The asset did not react the same way the LTC price did following the news of the Litecoin ETF application.
AVAX Price If An Avalanche ETF Is Approved
Grayscale’s move could potentially boost Avalanche’s price due to increased demand from institutional investors. Additionally, the Digital Large Cap Fund, which includes BTC, ETH, SOL, XRP, and AVAX, is bound to tie the price movements of these four assets together such that NetFlow into the ETF results in the price increase of all four assets.
To better understand how AVAX price might perform after an ETF approval, we can explore how BTC and ETH prices reacted following the approval of their ETFs.
When the U.S. SEC approved the spot Bitcoin ETF on January 10, the BTC price jumped 5% before retracing as investors sold the news. However, the asset later rose 57%, topping out at $73,000. As of Oct. 16, the BTC price is trading at $66,000, a 33% increase since the ETF approval.
The Ethereum price performance fell short compared to Bitcoin. After the approval of its spot ETF, ETH surged 21% in under 48 hours, nearly reaching $4,000. However, its price action in the months that followed was rather lackluster.
We can use the percentage gains from BTC and ETH as benchmarks. Bitcoin’s market cap is 109 times larger than Avalanche’s, and Ethereum’s is 28 times bigger. If AVAX were to react similarly, its price could theoretically surge to $2,943 and $756, respectively. However, adjusting for differences in trading volume, more realistic targets for Avalanche are $440 and $231.
Avalanche Price Analysis: $440 Is a Dream, But $160 Is A Reality
According to the AVAX price prediction, the asset is consolidating after a prolonged downtrend, currently trading within a Fibonacci retracement zone, around the 0.786 Fib level (~$23). The recent price action indicates a bottoming pattern, with multiple weekly candles finding support in the $20-$30 range. This suggests the potential for a trend reversal.
The first resistance target is the 0.27 Fibonacci extension level (~$74), followed by further targets at $110 and $165 as the AVAX price aims to reclaim higher levels.
In the short term, a breakout above $34 would confirm the bullish reversal, with the first short-term target at $62-$74.
There is strong support at the 0.786 Fibonacci retracement level (~$23), as this level has historically acted as a reversal point after extended corrections. If AVAX bears decide to push the price below the 0.786 fib levels (~$23), it would signal market weakness and turn the whole setup bearish. The Avalanche price would find lower support around $16, $11, and $8.
Can AVAX ETF Boost Avalanche
While the approval of an Avalanche-inclusive ETF could significantly boost the AVAX price, the actual impact will depend on various factors, including market conditions, trading volume, and investor demand. Historical trends from Bitcoin and Ethereum’s ETF approvals suggest that AVAX could see substantial gains, with potential price targets ranging from $160 to $440 in an optimistic scenario.
Frequently Asked Questions (FAQs)
1. What is an Avalanche ETF, and how does it differ from a regular ETF?
2. What are the potential price targets for AVAX if an ETF is approved?
3. Could AVAX realistically reach $440?
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