Reaching a notable six-month high of $20 the previous week, Avalanche (AVAX) caught the attention of investors, prompting exploration of the fundamental factors behind this impressive upward price movement.
Some analysis has pointed to GameFi’s resurgence within the Avalanche ecosystem as a key catalyst that could fuel further gains in AVAX.
Specifically, on Monday, AVAX revisited the $20 threshold, marking a significant milestone as this price level had not been seen since April 2023.
The rebirth of GameFi as a major growth catalyst suggests that the intersection of decentralized finance and gaming applications within the Avalanche network holds great promise.
As the market absorbs this resurgence, questions naturally arise regarding the sustainability of the bullish momentum and the underlying factors contributing to the recent AVAX price breakout.
In light of these developments, further analysis is warranted to understand the extent to which bulls can propel this rally and the broader implications of GameFi’s revival in the context of the Avalanche ecosystem.
AVAX market cap currently at $6 billion. Chart: TradingView.com
As optimism flooded the cryptocurrency industry, ecosystem prosperity saw widespread growth across various networks.
Avalanche (AVAX) has joined this trend perfectly, affirming its participation in the dominant positive sentiment within the crypto space. This collective rise highlighted the dynamism of various networks, including AVAX, as they navigated the changing landscape of the digital asset market.
Meanwhile, TraderJoe, a leading decentralized exchange (DEX) on the Avalanche network, has seen impressive growth, marked by a significant increase in trading volume and fees collected over a specific period.
Watching @TraderJoe_xyz in double play on Avalanche and Arbitrum.
– Trading volume +112%
– Fees +146%
– Supply-side fees increased to $138,000
– Trading volume per chain: 74% Avalanche/ 25% Arbitrum
Trader Joe appreciates the volume of both stories. pic.twitter.com/0BkP3zzU7V
– Emperor Osmo🧪 (@Flowslikeosmo) November 13, 2023
Trading volume saw an increase of over 100%, indicating a substantial increase in user activity on the platform. Simultaneously, fees generated by trading activity soared by 146%, reaching a substantial sum of almost $140,000.
At the time of writing, AVAX was trading at $17.03, down 6.5% over the past 24 hours, and is up a solid 32.4% over the past seven days, according to Coingecko data.
This increase in supply-side fees highlights the growing use of the TraderJoe platform within the Avalanche network. The breakdown of trading activity reveals that a substantial majority, representing 74%, occurred on the Avalanche channel, highlighting the popularity of the platform within the Avalanche network. The remaining 25% of transactions took place on Arbitrum. [ARB].
Avalanche network activity tells a different story
As this evolution progressed, another interesting aspect was observed in the network: during the last quarter, activity on the Avalanche network has seen a slowdown, with a decline in both transaction volume and active addresses on the prominent “C-Chain” compared to the previous quarter of 2023.
Data from DeFi Llama indicates a nearly 30% drop in Avalanche’s total value locked (TVL) in Q3, from $706 million to $512 million. Although there was a subsequent 10% rebound in TVL to $564 million, daily transactions continue to linger at a lower figure, settling at 232,000.
AVAX price in danger?
Nansen’s data reveals that daily active users reached a high of 86,000 in the third quarter, down from 117,000 in the previous quarter. Daily active transactions also saw a decline, going from 136,000 to 504,000, a significant change from the previous range of 200,000 to 550,000. Notably, on October 15, this figure reached a low of 110,000.
While these moves do not bode well for the immediate past, whether this decline jeopardizes AVAX’s price trajectory remains a complex question. General market sentiment and the network’s adaptability to emerging trends, particularly in the dynamic area of decentralized finance, will likely play a central role in determining the future of AVAX’s price.
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Featured image from iStock