Key Takeaways:
- Avalanche layer 1 protocol gains 51% in TVL quarter-to-date.
- AVAX doesn’t follow and consolidates in the wake of Bitcoin’s gains.
YEREVAN (CoinChapter.com) – Smart contract platform Avalanche’s native token AVAX continued to consolidate in the Wednesday session. The AVAX/USD exchange rate stood at $54.3 ahead of the New York trading hours. Meanwhile, the platform’s TVL (total value locked) has been steadily rising in Q4. It gained 51% and clocked at $5.88 billion on Oct 13.
Avalanche’s TVL gains
According to statistics from the Q3 Dapp Industry report, Avalanche’s TVL overshadowed Polygon in September. There are several strengths that the smart contract platform offers in the DeFi space. Its compatibility with Ethereum via the EVM is one of the advantages.
In addition, it offers a higher throughput of 4,500 TPS, and unlike Ethereum, it is not plagued with high gas fees and congestion.
Statistics also show that Aave lending/borrowing protocol accounted for 31% of Avalanche’s progress. Moreover, the launch of the DeFi incentive program Avalanche Rush fuelled the rally.
In hindsight, Avalanche Rush is a $180m liquidity mining program that aims to attract innovative DeFi protocols onto Avalanche, with the opportunity to earn rewards for contributing towards network liquidity.
According to a multichain TVL statistics dashboard DefiLlama, Avalanche’s TVL grew over 10% in the past 24 hours and stood at $5.88 billion in the Wednesday session.
As seen on the chart above, another protocol on Avalanche, a decentralized exchange (DEX) named Trader Joe, also logged substantial gains in the past week. In the past 24 hours alone, Trader Joe gained almost 49%, propelling the platform’s TVL.
Also read: Traders made more money off smart contract tokens than Bitcoin in September.
Why is AVAX still stalling?
Given the successes of its native platform, AVAX could have also turned bullish in the past two weeks. However, the digital asset has already lost over 20% since Oct 1. One of the primary reasons behind the consolidation is Bitcoin’s bullish streak.
In the past months, the altcoin market followed Bitcoin’s price action, copying its ups and downs. However, the flagship cryptocurrency has offered handsome rewards since the beginning of Q4 and attracted traders’ attention, overshadowing the altcoin market.
BTC grew almost 30% quarter-to-date. Meanwhile, smaller altcoins like Cardano’s ADA, Chainlink’s LINK, Dogecoin’s DOGE, and others took a back seat.
AVAX was not an exception. In a sideways movement, it traded right over its 50-day exponential moving average (EMA-50; red line on the chart below). The digital asset approached a resistance-turned-support line at $49.9. Should AVAX fail to hold on to EMA-50, the said line could assist the token and prevent a fall even lower.
Also read: Solana’s eyes bull run towards $275 despite SOL undergoing 35% correction.
