AVAX, the native token of the Avalanche ecosystem, surprised the market with double-digit gains amidst shortcomings in the broader cryptocurrency space. The AVAX token broke the $40 barrier on December 12, reaching an intraday high of $43. At the time of publication, the layer 1 token was trading at $38, up 12% in the last 24 hours and 123% in the last 30 days.
AVAX market cap soars 341% in two months
The recent rally has further increased the Avalanche’s total market value from $3.25 billion when the recovery began in mid-October to its current valuation of $14.35 billion. This is an increase of more than 341% in just two months.
This is $1.06 billion more than Dogecoin’s $13.29 billion, putting it in 9th place in the CoinMarketCap rankings.
AVAX’s market capitalization has also increased by 200% over the past 12 months, from $4.04 billion recorded in December 2022.
AVAX is not the only cryptocurrency surging within the Avalanche ecosystem. JOE (JOE), the native token of Avalanche’s decentralized exchange Trader Joe’s, and QI, the native token of Avalanche’s liquid staking protocol Benqi, are also soaring, with gains of 5% and 20% respectively in the last 24 hours.
Coq Inu (COQ), a memecoin built on top of Avalanche, is also recording impressive performance, rising 22% over the same period.
Honestly, I don’t even know if it’s the last time #AVAX This has been released wild. that much $COQ The vibe here is very strong, 100% of initial liquidity has been burned, 100% of supply has been released, 0 tokens have been reserved and 0 tokens are scheduled to be issued. Your standards for meme coins should now be this high.
that much… pic.twitter.com/3Ohw8p7tA4
— Viperxl007 (@Viperxl007) December 7, 2023
In a December 11 Cryptocurrency Fund Flows report, James Butterfill, head of research at CoinShares, said that while major cryptocurrencies such as Bitcoin and Ethereum have suffered sharp price declines this week, Solana (SOL) and Avalanche have each fallen by $3 million. and showed an inflow of $2 million, with the remainder remaining. “Clear favorite” in the altcoin sector.
This attention could fuel the Avalanche’s rally, but is the upswing over?
Fundamentals and a surge in user activity support Avalanche’s upward trend.
Avalanche is trading above a critical demand zone ranging from $15 to $20. All major moving averages are present here, which suggests that AVAX has strong support on the downside.
A rush of buyers around the above support levels is likely to provide the tailwind needed to push higher. If this happens, bulls could try to push the token to new annual highs as more buyers enter the market.
The Relative Strength Index (RSI) rises to 89, within overbought territory, indicating that the bulls are in full control of the price. Moreover, all major moving averages are below the price and pointing upward, adding credence to the bullish outlook.
The significance of the support zone between $15 and $20 was supported by on-chain indicators from IntoTheBlock’s Global GIOM (Money In/Out) model, which showed AVAX enjoying relatively strong support compared to upward resistance. For example, the major support level at $20 lies at the $18 and $30 price range, and previously, approximately 19.62 million AVAX was purchased from approximately 822,020 addresses.
Related: Avalanche ‘undervalued’ before posting 79% weekly gains — Analysts
Further substantiating the positive outlook for Avalanche was Total Value Locked (TVL) data reflecting growth within the project ecosystem.
TVL data analysis helps understand investor and developer interest in blockchain or decentralized applications (dApps). TVL is similar to bank deposits in decentralized finance (DeFi) projects and can influence market direction.
According to the chart above, there is clear evidence that the TVL of the Avalanche blockchain is increasing along with its price. According to data from DeFi TVL aggregator DeFiLlama, the amount locked in Avalanche has increased from $482.93 million on October 15, when AVAX prices began to rise, to its current value of $911.12 million. This represents a 90% increase.
This increase in TVL is a sign of growing demand among large on-chain users. This is highlighted by an increase in development activity, an on-chain indicator used to evaluate the progress and innovation of cryptocurrency projects.
According to Santiment, Avalanche’s development activity increased from 44 GitHub commits in mid-October to 284 GitHub commits on December 12.
This increase in development activity is considered optimistic as it signals increased demand for AVAX tokens due to an increase in network users.
The increase in development activity for smart contract protocols has been driven by the latest developments within the ecosystem. For example, JP Morgan’s blockchain Onyx announced last month that it was using the Avalanche subnet in a proof-of-concept trial for the Monetary Authority of Singapore’s project Guardian.
On December 12, Avalanche announced that Mirai Labs, developer of popular games Pegaxy and Petopia, was migrating its ecosystem from Polygon to the Avalanche subnet.
The Avalanche Evergreen subnet is a separate blockchain specifically designed for the needs of the institution with additional considerations for network privacy, gas capabilities, and authorization.
“With its subnet technology, unparalleled developer support, and exceptional scalability, Avalanche is increasingly becoming known in the blockchain industry as the optimal network for Web3 games.”@RealCoreyWiltonMirai Labs’ Co-Founder and CEO explains why he chose Avalanche.
— Avalanche (@avax) December 12, 2023
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.