- The Avalanche network witnessed a surge in its Total Value Locked (TVL).
- However, a decline in daily activity on the network could stop the gradual growth.
Avalanche has been on the receiving end of the current bullish sentiment of the crypto market. Over the last week, it registered an uptick in its TVL and market cap. However, this growth could come to an end soon due to many factors.
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On the brighter side
Well, before we go on to talk about the factors that can affect AVAX’s growth. It’s important to take a look at the areas where AVAX is performing well.
Over the last week, the market cap of AVAX increased by 2.81%. At press time, the overall market cap of the cryptocurrency stood at $6.17 billion.
Another area where Avalanche witnessed positivity was in the DeFi space. In the past week, its TVL increased by 1.71%. One of the reasons behind it could be the increasing number of transactions on the Avalanche network which grew by 4.63%.
🔺Avalanche Ecosystem Weekly Highlights🔺
Price gainers$DEXTF @DomaniProtocol$RELAY @relay_chain$SWAP @TrustSwap$ANKR @ankr
TVL gainers$KINE @KineProtocol$ROUTE @routerprotocol$GMX @GMX_IO$EMDX @emdx_io#AVAX #Avalanche #DEFI $AVAX pic.twitter.com/2MeLOtj5rv
— AVAX Daily 🔺 (@AVAXDaily) February 25, 2023
However, this surge in activity and TVL could be slowed down by Avalanche’s decline in daily activity. At press time, the number of daily active users on the network decreased by 4.87%.
Along with that, the number of new users signing up to the network also fell. It plunged from 161,300 to 154,980 in the last month.
Things take a turn for the worse
Much to the surprise of the network, even stakers started to lose interest in Avalanche.
According to data provided by staking rewards, the number of stakers on the Avalanche network declined materially. Not to forget, a decline in the number of users staking AVAX could not only harm the network but the token holders as well.
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Meanwhile, Avalanche’s NFT market also suffered over the last few days. The overall volume of the NFT market deteriorated by 13.39% in the last week.
Many of AVAX’s blue chip NFT collections underperformed in the last month. This could be one of the reasons why there was a lack of ample activity on the network.
Evidently, the lack of interest in the NFT market also impacted the AVAX token. According to data provided by Messari, AVAX‘s prices fell by 9.44% in the last week.
Consequently, the volatility of the AVAX token spiked.
Overall, even though Avalanche has shown growth in terms of TVL, it has still many challenges to overcome in areas such as the NFT sector and staking.
If the decline in activity on the network is not checked, it could cause harm to Avalanche’s growth in the long run.