Avalanche TVL Exceeds $1 Billion with AVAX Bulls Facing Obstacles
The Avalanche [AVAX] ecosystem is witnessing a renewed surge in activity as the market embarks on its recovery journey. Recent on-chain data has unveiled notable changes in several of Avalanche’s metrics, particularly its total value locked (TVL).
Avalanche’s TVL remains a far cry from its all-time high of $11.49 billion in December 2021, having undergone significant outflows during the crypto winter period.
In September of last year, the TVL plummeted below $500 million, only managing to surpass the $1 billion mark again this week.
As of the latest figures, Avalanche boasts a TVL of $1.07 billion. While this marks a substantial rebound, it still falls short when compared to its historical peaks. Additionally, there has been a notable resurgence in the network’s stablecoin market cap, reaching a local high of $2.31 billion.
The network’s stablecoin market cap had bottomed out at $536.96 million in October 2023, reflecting a staggering increase of over 300%. Nonetheless, similar to the TVL, Avalanche’s stablecoin market cap currently stands at a fraction of its peak at $4.67 billion in 2022.
Could the recovery in TVL and stablecoin market cap bolster AVAX’s upward momentum?
Stablecoin growth and TVL metrics are crucial indicators of a network’s expansion and liquidity. These factors play a significant role in fostering the growth of the DeFi ecosystem, potentially indicating a rise in organic demand for AVAX in the future.
AVAX has been following a downward trend since March, which appears to have stabilized around August.
Following a nearly 50% rally from its September lows, the cryptocurrency reached a recent high of $30.85 before experiencing a slight retracement to a price of $29.33 at the time of reporting.
Though AVAX bulls are encountering resistance, signaling a potential buildup in selling pressure post the recent rally, it raises questions on whether a retracement could ensue. Data from IntoTheBlock reveals that AVAX cruisers hold a substantial amount of coins, nearly on par with HODLers.
Cruisers typically refer to short-term holders with a holding period of less than 12 months. At the time of evaluation, there were 4.04 million cruiser addresses, 4.69 million HODLers, and 234,000 traders.
These findings hint that AVAX could face downward pressure if cruisers opt to capitalize on profits. However, the current market signs of recovery might mitigate the impact of selling pressure, suggesting a potential incentive for AVAX holders to anticipate further upside.