- Positive market activity revitalizes Avalanche’s total value locked (TVL) and stablecoin market capitalization.
- Will AVAX maintain its recent gains as selling pressure starts to build again?
The Avalanche [AVAX] network has seen a surge in activity as the market begins to recover. On-chain metrics highlight significant shifts in various aspects of Avalanche’s performance, particularly the total value locked (TVL).
Avalanche’s TVL is still considerably lower than its all-time high of $11.49 billion reached in December 2021, following substantial outflows during the crypto winter.
In September of last year, the TVL fell below $500 million, but it bounced back above $1 billion this week.
Source: DeFilLlama
As of now, Avalanche boasts a TVL of $1.07 billion. While this indicates a significant rebound, it still lags far behind its historical peaks. Additionally, the network’s stablecoin market cap has also seen a resurgence, reaching a local high of $2.31 billion.
After hitting a low of $536.96 million in October 2023, Avalanche’s stablecoin market cap has surged over 300%. However, similar to the TVL, its current value is just a fraction of its $4.67 billion peak in 2022.
Can the recovery in TVL and stablecoin market cap fuel AVAX’s upward trend?
The growth of stablecoins and TVL are critical indicators of a network’s growth and liquidity. They play a significant role in fostering the growth of the DeFi ecosystem, which could indicate increased organic demand for AVAX in the future.
AVAX has been entrenched in a macro bearish trend since March, a downtrend that seems to have stabilized in August.
Since reaching its lows in September, AVAX has rallied nearly 50%. Recently, it peaked at $30.85 but traded at $29.33 during the latest pullback.
Source: TradingView
AVAX bulls may face some resistance, indicating that selling pressure could be building following the recent rally. Is another pullback on the horizon? According to IntoTheBlock data, those holding AVAX for less than a year (cruisers) own nearly as many coins as long-term holders (HODLers).
As per observations, there are 4.04 million cruiser addresses, 4.69 million HODLers, and 234,000 traders.
Source: IntoTheBlock
Read Avalanche’s [AVAX] Price Prediction 2024–2025
These observations suggest that AVAX may be vulnerable to a downside if cruisers begin to realize their profits. Conversely, the selling pressure could be manageable, particularly as the market shows initial signs of recovery.
This may provide an incentive for AVAX holders to remain patient or anticipate further upside potential.
