Avalanche’s native token, AVAX, has recently dipped below the $10 threshold for the first time since January 2021. This price decline comes amidst partnerships with tech giants Alibaba Cloud and Amazon Web Services (AWS).
AVAX Price Decline
Over the past 24 hours, AVAX has experienced a 1.3% decline, pushing its price to $9.16. This drop contributes to a 14.5% decrease in AVAX’s value over the past month and a significant 50.5% loss over the past year.
The decrease in AVAX’s value has coincided with a reduction in network activity within the Avalanche ecosystem, as indicated by DeFillama data. The total value locked (TVL) in Avalanche has plummeted from $11 billion in November 2021 to its current level of $497 million. Notably, the TVL in AVAX has similarly dwindled, falling from its peak of 135 million AVAX in May 2022 to the current 53 million AVAX.
The Impact of Reduced TVL
The decline in TVL serves as a barometer for a more significant issue: diminishing activity on the Avalanche network. In the past 24 hours, Avalanche has witnessed only 30,000 active users, with $1.57 million in inflows, $10.8 million in trading volume, and a modest $7,882 in generated fees.
This starkly contrasts with the network’s peak performance in 2021, when daily transaction volumes reached $500 million. Daily fees averaged around $100,000, and daily users exceeded 80,000 in early 2022.
AVAX Token Unlocking and Selling Pressure
AVAX has also faced challenges due to its scheduled unlocking, which has added selling pressure to the digital asset. Further, Token Unlocks data reveals that AVAX’s 1-year emission stands at approximately 75 million tokens, equivalent to around $700 million.
Resilient Ecosystem and Development:
Despite the price decline and reduced network activity, Avalanche’s ecosystem continues to attract new development, indicating the network’s resilience. In May, Avalanche partnered with Alibaba Cloud to create the Cloudbase blockchain-based metaverse deployment platform.
Furthermore, Avalanche collaborated with Amazon Web Services (AWS) in January. Moreover, in the mean time Circle launched its Euro Coin stablecoin on the Avalanche blockchain.
Avalanche’s recent price decline and reduced network activity have raised concerns. The network’s ongoing partnerships and development efforts suggest a commitment to its long-term success. Also, the crypto community will closely monitor how Avalanche navigates these challenges and whether it can regain its previous strength.
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