Why Avalanche’s surge in activity could still have traders skeptical about AVAX
- Avalanche witnesses a surge in activity. However, AVAX’s price continued to decline.
- Development activity on the Avalanche network rose significantly.
The Avalanche network garnered significant attention from the cryptocurrency community. This led to a notable increase in the level of network activity and the revenue generated on the platform.
Read Avalanche’s [AVAX] Price Prediction 2023-2024
According to data provided by Token Terminal, the daily activity on the network increased by 105% in the last month. This was coupled with a 105.6% growth in its revenue.
A spike in activity on the protocol can foster greater adoption and drive the growth of the protocol over the long term.
Are the bears right?
However, despite the improvements made by the protocol in multiple sectors, the value of AVAX continued to decline over the past few weeks. One of the reasons for the cynicism from investors could be Avalanche’s upcoming token unlock.
The unlocking of AVAX tokens to early investors, contributors, and team members is expected to result in a substantial increase in the amount of AVAX in free-floating circulation.
This may create additional sell pressure on AVAX compared to many other coins, as investors may choose to realize profits by partially selling the unlocks. This is anticipated to occur consistently over the next two years.
At press time, AVAX was trading at $17.50. Its volume, over the last two weeks, fell from 624 million to 159 million. On the social front, it was seen that the number of social mentions and social engagements of Avalanche fell by 11.3% and 6.1% respectively according to data provided by LunarCrush.
Weighted sentiment also observed a decline as seen in the chart given below. A declining weighted sentiment suggested that the overall outlook of the crypto community towards AVAX had turned negative.
However, things could change for the better for AVAX soon. Token Terminal’s data indicated that the number of core developers and core commits being made by these developers had increased by 18.8% and 2.6% respectively.
Realistic or not, here’s AVAX market cap in BTC’s terms
If new changes continue to get made on the Avalanche network, it could result in investors getting attracted to the AVAX token yet again.