Lower Usage Leads to Decreased Prices: AVAX Analysis
Despite a recent rebound in gold and U.S. stocks, the cryptocurrency market continues to face downward pressure, particularly from potential selling activities related to Mt. Gox and other factors. This trend is expected to persist amidst the ongoing interest rate cutting cycle.
Upon analyzing on-chain data, encompassing activity levels, total value locked (TVL), and other metrics, it has become evident that certain older blockchain networks are experiencing a decline in usage, consequently resulting in a significant deterioration of their fundamentals. Avalanche (AVAX) stands out as one of the networks facing this issue.
Apart from the widely recognized SocialFi protocol Arena, Avalanche has remained relatively quiet in terms of developments. The number of daily active addresses on the platform stands at approximately 40,000, significantly lower than more established chains. Moreover, both Avalanche and Optimism have witnessed notable declines in TVL recently, with Avalanche recording net outflows.
Technical indicators further corroborate the weak performance of AVAX, with the Trend Sentinel Barrier (TSB) indicator consistently indicating a downtrend since July 4th. The KDMM (KD Momentum Matrix) highlights fluctuations in bullish and bearish momentum but also suggests a lack of strong positive movements.
Disclaimer: The information presented in this analysis is purely observational and should not be interpreted as investment advice. Individuals are urged to conduct their independent research and analysis before making any financial decisions based on the insights shared here.
In conclusion, the decreasing usage and weakening fundamentals of Avalanche are likely contributing to its underperformance compared to other public chains. As the market continues to evolve, investors are advised to remain vigilant and consider these factors when evaluating their cryptocurrency portfolios.
