- AVAX has been in a strong bullish trend in the past few weeks.
- It has jumped by over 50% from the lowest point in March this year.
- Avalanche has lost market share to the likes of Arbitrum and Optimism.
Avalanche price continued surging this week even as the network’s metrics remained under pressure. The AVAX token jumped to a high of $21.25, the highest level since February this year. It has jumped by more than 50% from the lowest level in March this year.
Avalanche shrinking market share
Avalanche is one of the biggest chains in the blockchain industry. It is a leading alternative to Ethereum that makes it possible for developers to build all types of decentralized applications. In the past few years, Avalanche has been used to build dApps in the gaming, decentralized finance (DeFi), and non-fungible tokens (NFT).
A key challenge for Avalanche is that its network has continued losing market share to other chains that have faster speeds and low transaction costs.
For example, Avalanche’s DeFi ecosystem has lost some market share recently. Today, the ecosystem has a total value locked (TVL) of more than $861 million, making it the 7th biggest blockchain in the world. At its peak, it was the third-biggest chain after Ethereum and BNB Chain. It has now been overtaken by the likes of Tron, Optimism, and Arbitrum.
Read more: How to buy Avalanche.
Looking beneath the surface shows that the situation is not looking good. For example, the Arbitrum version of GMX has a TVL of over $500 million compared to Avalanche’s $103 million.
Avalanche has also lost market share in industries like NFTs. Data compiled by CryptoSlam shows that the total volume of Avalanche NFTs sold in March were worth about $1.2 million. In contrast, Ethereum NFT sales in the past 24 hours totaled over $15 million. Arbitrum’s NFT sales in March were worth over $5 million.
So, why is AVAX price soaring? The main reason why Avalanche is soaring is because of the vibrant nature of the crypto market, with Bitcoin remaining above $30,000.
Avalanche price forecast
The 4H chart shows that the AVAX price has been in a strong bullish trend in the past few days. In this period, the coin has moved above the key resistance point at $20. It has jumped above all moving averages while the Relative Strength Index (RSI) and the Stochastic Oscillator moved above the overbought levels.
Further, the Average Directional Index (ADX) has risen to 40, signaling that trend is strong. Therefore, the coin has some more upside as buyers target the next key resistance point at $25. A move below $19 will invalidate the bullish view.
