Avalanche (AVAX) Plunges After ETF Hype Rally: What’s Next for the Blockchain Powerhouse?

Avalanche just hit an air pocket. The high-performance blockchain token AVAX is bleeding value after its recent ETF-fueled surge—classic buy-the-rumor, sell-the-news action that would make any Wall Street veteran nod cynically.

From Peak to Trough

The correction slices through recent gains as traders take profits. AVAX's chart paints a brutal picture of crypto volatility in action.

Market Mechanics Exposed

This dip reveals the fragile psychology driving digital asset markets. Every regulatory whisper triggers seismic price movements that would give traditional finance suits heart palpitations.

Long-term trajectory remains bullish for the smart contract platform, but today's bloodbath serves as a stark reminder that in crypto, what goes up must come down—often violently.

Is Avalanche’s ETF Hype Dying?

While the ETF application news may have propelled AVAX’s price, it was not enough to maintain the price level. Investors may have eventually come under market sell pressure, booking profits after AVAX hit $35.

The latest market dip could be due to uncertainties around the Federal Reserve’s monetary policy. Although the Federal Reserve rolled out its first interest rate cut of 2025, the crypto market continues to slump. Investors are likely moving their funds to gold, which hit a new all-time high recently. Avalanche (AVAX) and other assets are likely facing heavy liquidations. According to CoinGlass data, nearly $400 million was wiped out from the crypto market in the last 24 hours.

Will The Asset Rebound Soon?

September has historically been a bearish month for the crypto market, while October has historically been bullish. We may see a similar pattern in 2025 as well. Avalanche (AVAX) could recover if the market follows the historical pattern.

There is also a very high chance that the Federal Reserve will announce another 25 basis point interest rate cut next month. Such a development could lead to a massive market-wide rally. Avalanche (AVAX) and other crypto assets could see a surge in inflows under such circumstances.

There is also a possibility that macroeconomic factors will present challenges to Avalanche’s (AVAX) recovery.