Avalanche (AVAX) token price surged by 120% between September 2023 and 2024, driven by strong on-chain activity, especially staking activity. This article will delve into the key factors affecting the price of the AVAX token and explore the AVAX resistance levels to watch in the coming days.
1. Recent price trend of Avalanche (AVAX) token
1. Recent Price Movements: Since October 2023, the price of Avalanche (AVAX) has increased significantly. Avalanche (AVAX) lost its upward momentum in early January, with its price peaking at $43.44 on January 2 before starting to decline. This trend indicates that bearish sentiment in the market is beginning to intensify. On January 3, affected by market speculation that the Bitcoin (BTC) spot ETF may be rejected, the price of the Avalanche (AVAX) token quickly fell by 10%, after which the AVAX token stabilized around $37.
2. On-chain data analysis: Despite the intensification of market panic, important on-chain data shows that Avalanche investors are increasingly confident in the rapid recovery of the market, the selling trend is beginning to weaken rapidly, and AVAX staking activities are gradually increasing. Data shows that while the price of AVAX tokens is falling, its staking activities are also gradually increasing. As of January 1, the total amount pledged on the Avalanche (AVAX) chain was 258.52 million AVAX, but by January 5, this figure had increased to 266.59 million AVAX, with a total value of $260.85 million. The total amount pledged within three days increased by 7.05 million AVAX. Therefore, although the market trend is not clear, the investment confidence of Avalanche investors is recovering quickly.
2. What is Avalanche (AVAX)?
1. Platform introduction: Avalanche (AVAX) is a blockchain platform designed to provide high throughput, low latency and highly scalable applications and customized blockchain solutions. It provides a comprehensive set of tools to create and manage financial assets, thereby facilitating the development of scalable financial solutions. This open source, decentralized system relies on smart contracts and is the world's first blockchain platform to complete transactions within one second.
2. Compatible with Ethereum
Avalanche is perfectly compatible with all tools of the Ethereum network, and has a large number of block-producing nodes in the test environment. It can handle more than 4,500 transactions per second, firmly ranking at the forefront of major public chains. Avalanche creates an interoperable environment where users or organizations can create their own digital assets or DeFi applications in the Avalanche (AVAX) network.
3. The role of AVAX tokens
At the heart of the Avalanche ecosystem is the native token AVAX, which plays a key role in its governance structure. AVAX tokens can be used for staking or voting, and serve as the main transaction currency on the network. Users can also choose to use AVAX to pay for network fees.
3. Helping DeFi: Avalanche (AVAX) value and ecology are growing rapidly
1. Rapid development of the ecosystem
In the past month, the leading public chain ecosystems such as Ethereum, Solana, Fantom and Avalanche have made great progress. In particular, Fantom and Avalanche have also launched substantial ecological incentive plans, which not only led to the rapid increase in TVL of the two major public chains, but also a substantial increase in their token prices.
2. AvalancheRush Plan
The $180 million AvalancheRush liquidity mining incentive program released by Avalanche in 2021 has brought amazing gains to the AVAX token. The price of AVAX soared from about $23 to a high of $57.6, an increase of 150%. At the same time, this move also attracted attention on the Avalanche public chain.
3. Growth of TVL
The growth in total value locked (TVL) within the Avalanche ecosystem is also staggering, far exceeding the growth rates of Solana and Fantom, which also have liquidity incentive programs. The launch of the AvalancheRush incentive program reflects the Avalanche Foundation’s commitment to expanding its DeFi ecosystem. The plan aims to bring major DeFi protocols such as Aave and Curve to the Avalanche platform.
4. Explore the logic behind the recent crazy rise in AVAX token prices
1. Real World Assets (RWA) and GameFi’s strategic tilt
Avalanche’s (AVAX) recent token price surge has been fueled by a strategic tilt towards two key areas: real world assets (RWA) and GameFi. Especially after traditional financial (TradFi) giants such as JPMorgan Chase and Citibank began to use Avalanche's blockchain subnet to develop RWA projects, the price of AVAX tokens increased even more significantly.
2. AvalancheVista Fund
In addition, Avalanche has established the AvalancheVista Fund totaling US$50 million for research and development of RWA technology. The focus on Avalanche (AVAX) technology comes at a perfect time, especially considering that renowned private wealth management firm Bernstein predicts that $3 trillion in assets will be tokenized in the next five years.
3. Investor interest
This prediction is in line with recent investor interest in the AVAX token as they expect the emerging RWA track to bring higher returns from crypto investments. This interest is also reflected in the significant growth in the total value locked (TVL) of the Avalanche ecosystem, soaring from $528.02 million in October 2023 to $1.006 billion on December 24, 2023. However, as of January 5, 2024, Avalanche’s (AVAX) total TVL has fallen back to $867.83 million.
Conclusion
Avalanche (AVAX) token price has seen significant growth over the past few months, driven by strong on-chain activity and strategic expansion. Despite the challenges of market volatility and resistance levels, the AVAX token still has strong growth potential in the future and is expected to break through the price high of $50 in the future. Investors should pay close attention to market dynamics and on-chain data to seize the best investment opportunities.