Why Avalanche protocols are not the only crucial elements to AVAX rejuvenation

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  • Pro­to­cols under the Avalanche chain con­tributed to the TVL $800 mil­lion growth.
  • AVAX would need to main­tain sev­er­al uptick on-chain to over­come a fall.

Accord­ing to infor­ma­tion from DeFi Lla­ma, pro­to­cols under the Avalanche [AVAX] ecosys­tem have con­tributed immense­ly to it in the last 30 days. At the time of writ­ing, the AVAX Total Val­ue Locked (TVL) was $890.3 mil­lion. How­ev­er, it would have been impos­si­ble to reach the $800 mil­lion mark if not for the impact of Yield Yak, GMX, and Benqi.


Read Avalanche’s [AVAX] Price Pre­dic­tion 2023–2024


When do the reds end?

In the past one month, all these pro­to­cols have donat­ed dou­ble dig­its upticks to the AVAX TVL. How­ev­er, details from the DeFi aggre­ga­tor showed that the last 24 hours have been the same trend as most of the con­trib­u­tors end­ed with reds.

Avalanche DeFi TVL

Source: DeFi Llama

The con­di­tion above implies that many investors had deposit­ed into the dApps under the AVAX net­work while indi­rect­ly con­tribut­ing to the network’s health. But is there a chance that the decline does not last long?

Based on the on-chain data, AVAX could have a chance. This was because it was not out of the dis­cus­sions around the cryp­to com­mu­ni­ty. Accord­ing to San­ti­ment, the AVAX social dom­i­nance was 0.527% — an improve­ment from the last few days. If sus­tained, com­bined with uptrends from oth­er met­rics, could be able to push investors to recon­sid­er scal­ing the TVL.

How­ev­er, its vol­ume, which has repeat­ed­ly hit over 500 mil­lion, could not sus­tain the momen­tum. At press time, the AVAX vol­ume was down to 395.02 mil­lion. This decrease implied that trans­ac­tions pass­ing through Avalanche were not at their peak. Hence, traders were also not look­ing in the area to take advan­tage of a price increase.

AVAX social dominance and volume

Source: San­ti­ment

Regard­ing its NFT vol­ume, San­ti­ment revealed that traders had been involved in buy­ing and sell­ing AVAX col­lectibles late­ly. How­ev­er, as of 25 Jan­u­ary, the sales vol­ume was only $108,000. This was far below what had been record­ed two days before.


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


Need more from investors’ sentiment

Per investor sen­ti­ment, the on-chain infor­ma­tion plat­form showed that the pos­i­tives out­weighed the neg­a­tives. While the neg­a­tive sen­ti­ment was down to 15.07, the pos­i­tive took the oth­er route to 25.923. This meant that the cor­re­spond­ing social vol­ume had a more enthu­si­as­tic per­cep­tion towards AVAX rather than disinterest.

Avalanche positive and negative sentiment

Source: San­ti­ment

Addi­tion­al­ly, the sta­ble­coin whale sup­ply into AVAX was impres­sive at 42.85. So, it was not just retail investors turn­ing to AVAX, but deep pock­ets also did. Irre­spec­tive of the stance, there is no con­fir­ma­tion that AVAX would imme­di­ate­ly turn to greens. How­ev­er, the chance of resist­ing a fur­ther decline seemed much higher.

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