- Avalanche is celebrating a good transaction growth but has been losing liquidity.
- AVAX’s demand is cooling off. Can the bulls comeback now that price has reached major short-term support?
Press time Avalanche [AVAX] The crypto market cap ranking hovered at eleventh place. Its growing number of transactions could help it to reach the top 10, or market pressure may push it further down.
Avalanche’s next moves will be largely determined by the performance of its network. The results of a network analysis were mixed.
The Avalanche Blockchain, for example, has seen a positive increase in daily transactions.
The 8th of Janurary saw a spike in daily transactions to 586,650, the highest level for over a decade. It was a good sign that network usage is growing.
source: DeFiLlama
It is not enough to have a healthy network with daily transactions. To fully take advantage of growth opportunities, you need more. This requires positive TVL and stablecoin counts.
DeFiLlama claims that both TVL (the stablecoin) and the market cap of Avalanche have struggled to achieve positive growth.
Avalanche’s TVL was $1.375 Billion, or roughly 10% of the ATH it achieved in December 2020.
The Avalanche Network has seen a decline in liquidity. In March 2022, the market capitalization of stablecoins reached $4.68 Billion. At the end of 2023, it dropped to just $1.051 Billion.
In 2024 it will recover to $2.43 billion, but this year has seen significant outflows.
Source: DeFiLlama
Avalanche stablecoin’s market capitalization has fallen by approximately $1 billion over the past 10 days. In the last 10 days, Avalanche’s stablecoin market cap has fallen by $1 billion.
AVAX approaches noteworthy support after recent dip
AVAX was uncertain whether mixed statistics (growing transaction and decreasing stablecoins), would impact the price of AVAX.
Price movements of the cryptocurrency have been closely synchronized with current market conditions.
AVAX was trading at $36.46 when we went to press, down 18.7% in the past week.
TradingView
AVAX approached a temporary support zone in the range of $35. This support zone may pave the path for a quick term recovery. Data on historical concentrations may provide insight into the current state of demand.
The whale stock was up to 26.53 AVAX, or 24.42 % on January 1, but down to 25,59 AVAX, or 24.45 % as of January 8.
Investors, who control the largest supply of AVAX, have seen the biggest shift.
Source:
Investor holdings dropped from 49.59 millions coins (45.65% to 47.06million coins (47.78%).
Click Here to Read Avalanche’s [AVAX] Price Prediction 2025–2026
Retailers also reduced their AVAX holdings during this period from 32,51 million (29.93%) down to 32.43 millions (30.87%).
Data from historical concentration confirms outflows in all categories. The data confirms that investors are cautious.
“This article is not financial advice.”
“Always do your own research before making any type of investment.”
“ItsDailyCrypto is not responsible for any activities you perform outside ItsDailyCrypto.”
Source: ambcrypto.com
