Avalanche [AVAX]: Positivity looks abound in the ecosystem but here’s the caveat
Terra’s unfortunate de-pegging event made May a bloody month for the overall crypto ecosystem. Despite the obvious downtrend, one particular ecosystem, Avalanche showcased some promising developments.
…Avalanche by making the subnet technology work in scaling blockchains. Q1 marked the beginning of Avalanche’s highly anticipated GameFi subnet launches. Crabada moved to its subnet seamlessly and hence, reducing the gas fees on C-Chain. Crabada quickly passed 5,000 users, measured by the number of unique wallet addresses interacting with the application’s smart contracts.
In fact, at press time, over three million unique wallets were created on Avalanche’s C-chain alone. Furthermore, close to two dozen additional subnets were in development, at press time.
TVL on Avalanche network measured in native AVAX hit an all-time high in May 2022 — sitting around 300 million AVAX. This 83% surge shows the strength of the DeFi ecosystem on Avalanche. The Total Value Locked (TVL) on Avalanche’s DeFi protocol stood at $3.68 billion with AAVE V3 dominance of 34.01%.
Unfortunately, given the bloodshed, AVAX did suffer a 5.5% correction in the TVL.
Despite 2022 proving to be one of the largest roadblocks, AVAX did manage to surprise investors across the crypto industry. For instance, monthly transactions hit ~32 million in May, which is also an ATH. Within the same period, unique contracts deployed on the network reiterated the same ‘ATH’ trend. In May, the number of unique contracts deployed crossed ATH: >166k (+81% since 1 May).
Lastly, stablecoins USDC and DAI have increased their native supply on the Avalanche network. All the aforementioned factors or attributes showcase or rather paint a promising picture for the flagship network. To add to this, exchanges such as Coinbase too have lent support by adding Avalanche to its native Coinbase Wallet.
In addition, crypto analysts such as Michael van de Poppe charted AVAX potential surge by over 60% from current levels.
In a 3 June tweet, the Dutch trader opined:
“Potential bullish divergence here on the daily, through which continuation towards $40 area is possible with the current market. However, overall assuming we’ll go into an accumulation phase with multiple support zones beneath us.”
Okay, then explain this…
Well, certainly AVAX could fetch the said surge in the long run, but shorter form paints a slight grim picture. AVAX suffered a fresh 3% correction as it traded at $23.5 mark. Moreover, the development activity took a hit in recent times. Notably, after 28 May, it has been declining sharply.