AVAX, the 9th largest cryptocurrency by market capitalization, has defied recent selling pressure and surged a remarkable 13% in the last 24 hours. The rally pushed the Avalanche Network token to a 10-day high of $36, sparking optimism among investors for a more sustained upward trend.
Analysts attribute this positive momentum to two key factors: increased activity in a decentralized social app called The Arena and the introduction of a groundbreaking scaling solution from Ava Labs.
Solid growth: AVAX TVL up 27%
The Arena, a SocialFi platform built on the Avalanche blockchain, achieved a remarkable 27% surge in total value locked (TVL) in just 24 hours. It is the fourth largest SocialFi decentralized application (dApp) with over $798,000 in deposits.
Source: Defillama
Arena aims to capitalize on the growing popularity of similar platforms such as Friend.tech. Despite facing a brief setback due to exploits shortly after launch, proponents see the recent rebound as a potential turning point. Given that AVAX is The Arena’s utility token, its success could directly contribute to the cryptocurrency’s rise in value.
But one of the catalysts behind Avalanche’s bullish momentum comes from Ava Labs’ ambitious new project, Vryx. This innovative scaling solution aims to transform transaction processing on the Avalanche network, promising an impressive capacity of 100,000 transactions per second (TPS) without compromising security or decentralization.
1/ Introducing Vryx: Enhanced Decoupled State Machine Replication
(how #avalanche HyperSDK reaches HyperTPS) https://t.co/eY3uWcyTPr
— Patrick O’Grady 🔺 (@_patrickogrady) January 26, 2024
Avalanche currently trading at $35.02 on the daily chart: TradingView.com
The successful implementation of Vryx, which addresses a critical challenge for blockchain technology: scalability, has the potential to attract new users to the Avalanche ecosystem.
AVAX Surge: Excitement Amidst Volatility
In relation to this, the derivatives market was also shaken due to the recent surge in AVAX price. According to NewsBTC’s analysis of Coinglass data, open interest (OI) in AVAX futures has increased by a whopping 20% in the past 24 hours to $239 million.
Source: Coinglass
Despite promising developments, caution is needed. Cryptocurrency markets are notorious for volatility, and broad market sentiment plays a significant role in AVAX’s performance. Ongoing market turmoil could weaken AVAX’s momentum. Additionally, the success of The Arena and Vryx remains uncertain, so developments will need to be monitored closely.
Avalanche’s recent surge is considered positive and provides a promising indicator for AVAX’s future. Increasing adoption of The Arena and a successful deployment of Vryx could increase demand for the token, potentially sustaining its upward trajectory. However, investors are reminded that they should conduct their own research and exercise caution before engaging in cryptocurrency investments, considering the inherent risks associated with the market.
Featured image from Shutterstock, chart from TradingView
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