AVAX challenges the market to the altcoin party's last danceWhat we see on the above chart of AVAX is a beautiful cup & handle formation.
The huge increase in volume shows that masses of AVAX coins obviously changed hands during the handle formation. So there was a lot of accumulation here. Most likely in anticipation of the Avalanche price breaking out of its formation this week and reaching a new all-time high.
The flag formation, which is the handle of the cup, has already been broken to the upside. Currently, the Avalanche price is trying to establish the 0.382 Fibonacci level as support, in order to break the confirmation line ($58.50) from there. It failed its first attempt over the weekend.
The minimum price target resulting from the chart pattern is $110. As luck would have it, this price target falls pretty much at the 1.618 Fibonacci level.
At the current price of $51.72, that would represent an increase of about 115%.
A final bullish week that has many investors in the market forgetting about the looming threat of a crash makes perfect sense.
Money in the crypto market moves in cycles. It flows from larger ecosystems to smaller ones. When the smaller ecosystems slowly overheat, the money flows back into the larger ones. This process can often repeat itself several times until the last bit of return has been squeezed out of the market and the whole scheme collapses in on itself.
The reason for the collapse is the inflated prices for which there are no longer enough buyers to sustain the rally.
But what ecosystem is left? The NFT hype has gotten out of hand and has become the playground of a few big players. The so-called "floor prices" of certain exclusive NFT classes are an illusion, as it is almost impossible to find a buyer in the market at these prices.
DeFi blue chips on Ethereum have stagnated. Polygon had its moment as the first legitimate scaling solution, but that moment has already passed. Solana and many of the dApp tokens are already overpriced and Cardano, despite its Alonzo upgrade, lacks the promised wave of killer dApps. So the only thing left, in theory, is Avalanche's still relatively young ecosystem.
What will ultimately cause the market to collapse? Probably the realization that none of these new smart contract blockchains have launched even one innovative DeFi app that doesn't already exist on the Ethereum blockchain.
Disclaimer: This analysis is an excerpt from the Bitcoin forecast on the German crypto blog Bitcoin-Bude. Source: Avalanche Kurs Prognose
