Explore how AVAX price could rise with potential approval of the Avalanche ETF, as suggested by recent Grayscale Large Cap Fund news.
Highlights
If the AVAX price reacts the same as BTC and ETH after the ETF, it will rise to $440 and $231, respectively.
AVAX is one of the crypto assets in the Grayscale Digital Large Cap Fund that will be converted into an ETF.
Avalanche shares underperformed following the announcement, falling 2.6%.
The price of AVAX has been in the news since the beginning of this week. The potential approval of the Avalanche (AVAX) ETF has sparked investor excitement as blockchain's rapidly growing ecosystem draws attention. Recent developments, including the inclusion of assets in the Grayscale Digital Large Cap Fund, hint at the possibility of an ETF. While not exclusive, the move marks a significant development for the cryptocurrency, which could see its popularity and price soar. How high will AVAX rise if the ETF is approved?
Avalanche is trading at $27.75, down 2.6% in the past 24 hours. The asset did not react as much as LTC price did after the news of the Litecoin ETF application.
If the Avalanche ETF is approved, AVAX's price
Grayscale’s move could push up Avalanche’s price due to increased demand from institutional investors. In addition, a digital large-cap fund that includes BTC, ETH, SOL, XRP, and AVAX would necessarily tie the price movements of these four assets together, such that NetFlow into the ETF would lead to price increases for these four assets.
To better understand how AVAX’s price would perform after the ETF was approved, we can explore how BTC and ETH’s prices reacted after their ETFs were approved.
On January 10, the SEC approved a spot Bitcoin ETF, and the BTC price rose by 5% before falling back as investors sold off. However, the asset subsequently rose by 57%, reaching a high of $73,000. As of October 16, the BTC price was $66,000, up 33% since the ETF was approved.
Ethereum’s price performance has lagged slightly compared to Bitcoin. After its spot ETF was approved, ETH surged 21% in less than 48 hours to nearly $4,000. However, its price action in the following months has been rather lackluster.
We can use the percentage gains of BTC and ETH as a benchmark. Bitcoin’s market cap is 109 times larger than Avalanche’s, and Ethereum’s market cap is 28 times larger than Avalanche’s. If AVAX reacted similarly, its price could theoretically surge to $2,943 and $756, respectively. However, given the difference in trading volumes, a more realistic target for Avalanche is $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 long downtrend and is currently trading within the Fibonacci retracement area, around the 0.786 Fibonacci level (around $23). Recent price action suggests a bottoming pattern, with multiple weekly candles finding support in the $20-30 range. This suggests a possible trend reversal.
The first resistance target is the 0.27 Fibonacci Extension level (around $74), followed by further targets of $110 and $165 as AVAX price aims to reclaim higher levels.
In the short term, a breakout above $34 would confirm a bullish reversal with the first short-term target at $62-74.
AVAX Price Analysis
There is strong support at the 0.786 Fibonacci Retracement level (around $23) as this level has historically served as a reversal point after long corrections. If the AVAX bears decide to push the price below the 0.786 Fibonacci level (around $23), it will indicate market weakness and make the entire setup bearish. Avalanche price will find lower supports around $16, $11, and $8.
Can the AVAX ETF boost Avalanche’s growth?
While the Avalanche ETF’s approval could significantly boost AVAX’s price, the actual impact will depend on a variety of factors, including market conditions, trading volume, and investor demand. Historical trends in Bitcoin and Ethereum ETF approvals suggest that AVAX could rise significantly, with potential price targets between $160 and $440 in an optimistic scenario.
