- Bullish activity breathes more life into Avalanche TVL and stablecoin market cap.
Can AVAX hold on to recent gains as sell pressure gradually creeps back in?
As a seasoned researcher with years of experience navigating the cryptocurrency market, I find myself intrigued by Avalanche’s recent surge. The TVL and stablecoin market cap recoveries are indeed promising signs that could potentially signal more organic demand for AVAX moving forward. However, it’s important to remember that a bull market can sometimes feel like trying to catch a greased pig in a hurricane – exhilarating but unpredictable!
In recent times, there’s been a surge of activity within the Avalanche [AVAX] network as markets begin to bounce back. Notably, on-chain information has shown substantial shifts in several key Avalanche metrics, particularly the Total Value Locked (TVL).
The total value locked (TVL) in Avalanche has yet to reach its previous all-time high. That peak was $11.49 billion in December 2021, but since then, the network has seen substantial withdrawals due to the crypto winter.
Last September, the TVL fell beneath $500 million, but it didn’t exceed $1 billion again until this current week.
At the moment of publishing, Avalanche boasted a TVL (Total Value Locked) of $1.07 billion. This is an impressive rebound, but it’s still dwarfed by its past peak values. Additionally, we noticed a substantial recovery in the market capitalization of the network’s stablecoins, reaching a local high of $2.31 billion.
In October 2023, the value of the network’s stablecoin market reached a minimum of $536.96 million, which represents an increase of over 300% from its initial point. However, much like Total Value Locked (TVL), the market cap of Avalanche’s stablecoins is currently only a small portion of its peak value of $4.67 billion in 2022.
Can the TVL and stablecoin market cap recovery support AVAX upside?
Stablecoin growth and TVL are vital measures of a network’s growth and liquidity. They facilitate DeFi ecosystem growth so, technically this could signal more organic demand for AVAX moving forward.
AVAX has been on a macro bearish trend since March, which seems to have leveled out in August.
AVAX has increased by nearly half since its low points in September. It reached $30.85 at its highest point, but after a minor dip in the last day, it’s currently valued at $29.33 due to a slight retreat.
It appears that the supporters of AVAX, following its recent surge, are encountering some pushback, hinting at a potential increase in selling activity. Could there be another pullback on the horizon? Data from IntoTheBlock indicates that those who cruise along with AVAX own nearly as much coins as long-term holders (HODLers).
In simpler terms, we can say that “Cruisers” refer to investors who hold their assets for less than a year. At the moment of observation, there were approximately 4.04 million such cruiser addresses, 4.69 million long-term HODLers (investors who hold their assets for over a year), and around 234,000 active traders.
Read Avalanche’s [AVAX] Price Prediction 2024–2025
The information presented implies that there could potentially be a decrease in AVAX‘s value if cruisers opt to cash out their profits. However, it’s worth noting that the current market situation, which is still in its early stages of recovery, might not see as much selling pressure compared to other periods.
This means there might be some incentive for AVAX holders to wait or more potential upside.
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2024-09-29 13:11