The network’s DApp use lags behind its rivals, and AVAX is testing support at $14.80, signaling that the most direct route is downward.
Avalanche (AVAX) has dropped 45 percent of its value in the past 30 days, and at the same time, the overall market price of cryptocurrencies declined by 29 percent.
This decentralized application (DApp) platform is a major competitor in the layer-1 and layer-2 race, and it ranks highest in intelligent contract deposits and active addresses despite the recent downturn. Investors are still arguing whether the network is still a “real” rival due to the token price’s underwhelming performance.
AVAX hit the $14.80 support many times as a result of the severe sell-off in risky assets, even though its market value is at $4.8 billion. Also worthy of notice is the network’s astounding $3.2 billion total value locked (TVL).
Comparatively speaking, Solana (SOL) has a $2.1 billion TVL and fairly cheap network fees. Nevertheless, Avalanche’s valuation at the $14.80 price level is approximately three times smaller than SOL token’s market cap, which is now $12.9 billion.
Because it measures the deposits made on the network’s smart contracts, the TVL indicator is absolutely crucial. If we use the Ethereum layer-2 solution Polygon (MATIC) as a proxy, the network has a TVL of $1.8 billion, but the token’s market cap is $3.5 billion.
Total Value Locked Increased, But The Number Of Users Declined
The network’s TVL rose to 184 million AVAX tokens in the past 60 days, improving Avalanche’s core decentralized application statistic. This indicates that investors did not eliminate tokens from AVAX’s decentralized applications even as its price has fallen (DApps).
The network’s TVL has considerably enhanced by 35% in AVAX tokens over the past two months. BNB Chain suffered a 14 percent drop within the same period, while Ethereum’s TVL grew by 10% in terms of ether.
Traders should review DApp usage numbers to see whether the TVL gain in Avalanche is positive. The statistic is useless for some applications because they don’t require significant deposits, such as games and marketplaces.
DappRadar’s data shows that on June 21, compared to the previous month, fewer Avalanche network addresses connected with decentralized applications. Moderately, the BNB Chain had a 16% fall in users, while Polygon saw a 29% drop.
Price Follows Fundamentals, Which Have Gone Down
The drop in network use is worrying even if Avalanche’s TVL has outperformed rival DApp networks. For example, QuickSwap, Polygon’s top DApp, has 161,040 active users, whereas Trader Joe has 93,130 dynamic addresses.
The information above may help clarify why the price of AVAX decreased by 45 percent in 30 days and shows that Avalanche is in trouble. Until network utilization data, precisely the number of active addresses in decentralized finance, improve, investors will simply continue to be dubious of the $14.80 support (DeFi).