Avalanche (AVAX) is a popular blockchain that has seen a decline in its key metrics over the past week. The market capitalization and total value locked (TVL) have both decreased, indicating a bearish trend. In this article, we will examine why Avalanche’s key metrics may continue to decline and the potential impact on the crypto community.
AVAX’s Recent Metrics
According to AVAX Daily, a popular Twitter handle that posts updates related to Avalanche blockchain, AVAX’s market capitalization experienced a double-digit decline of 13% in the last seven days. Additionally, the TVL decreased by more than 3%, indicating a bearish trend.
🔺Avalanche Ecosystem Weekly Highlights🔺
Price gainers$SWAP @TrustSwap$CQT @Covalent_HQ$FRM @FerrumNetwork$PENDLE @pendle_fi
TVL gainers$WOW @KineProtocol$EMDX @emdx_io$SUSHI @SushiSwap$SIS @symbiosis_fi#AVAX #Avalanche #DEFI $AVAX pic.twitter.com/CEiZS3pIT3
— AVAX Daily 🔺 (@AVAXDaily) March 4, 2023
However, there are some positive developments to consider. Despite the decline in market capitalization and TVL, the number of active addresses increased, which is a positive sign of increased usage of the Avalanche network. Furthermore, Dune’s data revealed that the number of weekly addresses gained upward momentum since the beginning of this year.
In terms of fees, Token Terminal reported that Avalanche experienced a spike in fees and revenue on 3 March 2023, after a steady decline. Other on-chain metrics such as demand in the futures market and bearish sentiments have also shown some support for Avalanche.
Potential Issues
While some metrics have been positive, the development activity metric moved southward over the past week. This decline could indicate that fewer efforts are being put by the developers to improve the network, which could lead to problems in the future.
Additionally, the daily chart of AVAX shows the Exponential Moving Average (EMA) Ribbon, indicating a possible bearish takeover as the 55-day EMA is about to flip the 20-day EMA. AVAX’s Money Flow Index (MFI) also went down considerably from the neutral zone, which is a bearish signal. The Chaikin Money Flow (CMF) was also below the neutral zone, increasing the chances of a price decline.
Impact on the Crypto Community
The decline in AVAX’s key metrics could have an impact on the crypto community. If the trend continues, it could lead to a decrease in investor confidence, potentially causing a price decline. Furthermore, if the developers continue to show a lack of effort, it could lead to issues with the network, causing further problems.
Conclusion
Overall, while there are some positive developments in terms of AVAX’s active addresses and demand in the futures market, the decline in key metrics such as market capitalization and TVL, combined with a lack of development activity, could lead to potential issues in the future. It’s essential to keep a close eye on these metrics to determine whether the decline will continue or if there will be a revival of the Avalanche network.
