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Avalanche’s growth can come to a halt if these factors are not addressed

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Avalanche's growth can come to a halt if these factors are not addressed

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  • The Avalanche network witnessed a surge in its Total Value Locked (TVL).
  • However, a decline in daily activity on the network could stop the gradual growth.

Avalanche has been on the receiving end of the current bullish sentiment of the crypto market. Over the last week, it registered an uptick in its TVL and market cap. However, this growth could come to an end soon due to many factors.


How much are 1,10,100 AVAX worth today?


On the brighter side

Well, before we go on to talk about the factors that can affect AVAX’s growth. It’s important to take a look at the areas where AVAX is performing well.

Over the last week, the market cap of AVAX increased by 2.81%. At press time, the overall market cap of the cryptocurrency stood at $6.17 billion.

Another area where Avalanche witnessed positivity was in the DeFi space. In the past week, its TVL increased by 1.71%. One of the reasons behind it could be the increasing number of transactions on the Avalanche network which grew by 4.63%.

However, this surge in activity and TVL could be slowed down by Avalanche’s decline in daily activity. At press time, the number of daily active users on the network decreased by 4.87%.

Along with that, the number of new users signing up to the network also fell. It plunged from 161,300 to 154,980 in the last month.

Source: Dune Analytics

Things take a turn for the worse

Much to the surprise of the network, even stakers started to lose interest in Avalanche.

According to data provided by staking rewards, the number of stakers on the Avalanche network declined materially.  Not to forget, a decline in the number of users staking AVAX could not only harm the network but the token holders as well.


Realistic or not, here’s AVAX’s market cap in BTC terms


Meanwhile, Avalanche’s NFT market also suffered over the last few days. The overall volume of the NFT market deteriorated by 13.39% in the last week.

Many of AVAX’s blue chip NFT collections underperformed in the last month. This could be one of the reasons why there was a lack of ample activity on the network.

Source: AVAX NFT STATS

Evidently, the lack of interest in the NFT market also impacted the AVAX token. According to data provided by Messari, AVAX‘s prices fell by 9.44% in the last week.

Consequently, the volatility of the AVAX token spiked.

Source: Messari

Overall, even though Avalanche has shown growth in terms of TVL, it has still many challenges to overcome in areas such as the NFT sector and staking.

If the decline in activity on the network is not checked, it could cause harm to Avalanche’s growth in the long run.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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