Avalanche drops by 25%; will AVAX holders stay loyal despite the unrest
- Almost 100% of AVAX holders plunged into losses.
- While volatility remains high, traders continue to overlook AVAX contracts.
“They say this is a big rich town. I just come from the poorest parts.” These lyrics coined from 50 Cents’ Big Rich Town perfectly matches the state of Avalanche [AVAX] whose holders have had to deal with losses for a long period.
Compared to the other cryptocurrencies in the top 20 per market cap, AVAX seemed to be the only one in this state.
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And while these holders may have hoped for respite, that has not been the case. To make matters worse, IntoTheBlock data showed that 99.5% of AVAX holders were now holding the token at a loss.
No result for diamond hands
Although holders of AVAX have held the token through thick and thin, this is the first time that almost 100% of the holders would have no profit to show for their loyalty. Undeniably, AVAX’s price performance this year has been largely responsible for the current condition.
In the last 90 days, AVAX has lost 25.70% of its value. On a Year-To-Date (YTD) basis, it has not been any better, decreasing by 51.16% in the process. Besides its price action, other parts of the Avalanche ecosystem have been the same— sometimes, worse off.
One such case was Avalanche’s Total Value Locked (TVL). Used to measure the total value of digital assets staked or locked in a distributed application, the TVL shows how much trust investors have in a protocol. At the time of writing, Avalanche’s TVL was down to $536.12 million— an 18.55% decrease in the last month.
So, the decline in TVL suggests that Avalance has become a protocol that market participants have avoided. Therefore, opening its health to potential risks.
Great for development, not the token
But in terms of development activity, Avalanche ensured that upgrades on its network remained active. At the time of writing, AVAX’s development activity had risen to 29.9.
This increase suggested that the public GitHub repositories linked to Avalance have been impressive. But can this change the course of its price action? Well, the two-week price volatility suggested that AVAX’s price could tilt far away from its current value.
At press time, the price volatility had increased to 0.069. However, the hike also depicts that AVAX’s price could move in either direction. Either the value skyrockets highly or the plunge would be massive.
Read Avalanche’s [AVAX] Price Prediction 2023-2024
As a result of AVAX’s underwhelming state, traders have overlooked opening contracts linked with the token.
At the time of writing, the Open Interest was $76.66 million. Open Interest is the total value of outstanding derivatives contracts for an asset. So, the decrease implies that liquidity flowing into AVAX contacts has decreased.