Avalanche TVL Surpasses $1B Amid AVAX Resistance

Avalanche Ecosystem on the Rebound

The Avalanche [AVAX] ecosystem has entered recovery mode, showcasing significant changes in on-chain metrics, particularly the total value locked (TVL). Here are some key points:

• The historic peak of Avalanche’s TVL was $11.49 billion in December 2021.
• During the crypto winter, the network experienced heavy outflows, resulting in a drop below $500 million in September 2022.
• As of now, Avalanche’s TVL stands at $1.07 billion, marking a noteworthy recovery but still far from its historic highs.

Stablecoin Market Cap Recovery

Alongside the recovery in TVL, there has been a significant uptick in Avalanche’s stablecoin market cap:

• The stablecoin market cap recently reached a local high of $2.31 billion.
• It hit a low of $536.96 million in October 2023, representing an increase of over 300%.
• However, this remains a fraction of its peak of $4.67 billion in 2022.

Can TVL and Stablecoin Growth Support AVAX Upside?

The growth in stablecoin market cap and TVL are vital indicators of a network’s liquidity and growth potential. These factors play a crucial role in facilitating DeFi ecosystem expansion, signaling more organic demand for AVAX moving forward.

Despite the bullish trend, AVAX has been on a macro bearish trajectory since March, leveling out in August. Key metrics include:

• AVAX has rallied nearly 50% from its September lows.
• It recently peaked at $30.85 but retraced to $29.33 at the time of writing.

AVAX Bulls Facing Resistance

AVAX bulls are currently experiencing resistance, suggesting the potential for building sell pressure after the recent rally. Will a retracement occur? According to IntoTheBlock data:

• AVAX cruisers hold nearly as much as long-term HODLers.
• There are approximately 4.04 million cruiser addresses and 4.69 million HODLers.
• Additionally, there are around 234,000 traders observed.

This data suggests that AVAX might be at risk of downside if cruisers decide to take profits. However, the sell pressure may not be significant, especially given the market’s signs of recovery. This scenario presents an incentive for AVAX holders to wait for more potential upside.

Conclusion

In summary, while Avalanche is experiencing a resurgence in both TVL and stablecoin market cap, AVAX faces critical resistance levels. The dynamics between short-term cruisers and long-term HODLers will be pivotal in determining the next steps for AVAX. Investors will need to watch these metrics closely as the market continues to evolve.