- Avalanche’s daily active addresses and TVL rose sharply in the last month.
- AVAX was up by 30% in the last seven days, but indicators turned bearish.
Avalanche [AVAX] registered a massive spike in its generated fees in the recent past, reflecting high usage.
Though this might look to be a positive sign only for the blockchain, it might have a broader impact on the ecosystem, as historically, such incidents have always been accompanied by price hikes.
Is Avalanche up to something?
Thor Hartvigsen, a popular DeFi researcher, recently posted a tweet revealing a major development in the Avalanche ecosystem. The blockchain witnessed a surge in its generated fees recently, as the value touched $3.5 million.
Yesterday @avax generated $3.5m in fees from onchain activity.
This is nearly 2x as large as the previous all time high from the previous bull.
Active users are further up ~2.5x in the past month.
Red coin gud coin?? pic.twitter.com/1DJiAh1lsY
— Thor⚡️Hartvigsen (@ThorHartvigsen) December 16, 2023
Not only that, but AMBCrypto’s analysis of Artemis’ data revealed that both Avalanche’s daily active addresses also surged over the last month. A similar increasing trend was seen in terms of its TVL, signifying growth in the DeFi ecosystem.
Source: Artemis
If history is to be considered, the last time AVAX’s fees surged, its price also gained bullish momentum. Such an incident last took place during January–April 2023, during which there was a clear rise in its price.
This time, the increase in fees was twice as large compared to the previous one.
Source: Santiment
Will AVAX maintain its rally?
The effect of the rise in fees was also visible this time, as AVAX was among the only top coins that registered double-digit gains. According to CoinMarketCap, AVAX was up by more than 30% in the last seven days alone.
At the time of writing, it was trading at $42.30 with a market capitalization of over $15.57 billion.
However, Avalanche’s growth rate slowed down as its price only increased by 1% in the last 24 hours. Therefore, AMBCrypto checked the token’s daily chart to see what to expect next.
As per our analysis, AVAX’s MACD continued to support the bulls. Its Chaikin Money Flow (CMF) was also well above the neutral mark.
Nonetheless, the Money Flow Index (MFI) was in the overbought zone, which could push the token’s price down in the coming days.
Additionally, Avalanche’s price had touched the upper limit of the Bollinger bands. This meant that selling pressure on the token might increase and, in turn, reduce its price.
Source: TradingView
Realistic or not, here’s AVAX’s market cap in BTC’s terms
Avalanche also witnessed a drop in its social metrics in the recent past, as evident from the decline in its social metrics when writing the report.
Moreover, despite the massive rise in value, AVAX’s Weighted Sentiment dropped sharply, meaning that negative sentiment was dominant in the market.
Source: Santiment
