- AVAX crypto token has been under pressure in the past few days.
- Avalanche has continued losing its market share in key industries.
Avalanche price has recoiled in the past few days and underperformed most cryptocurrencies as concerns about its ecosystem continues. It retreated to a low of $16.50, which was much lower than last week’s high of $18.62.
Avalanche ecosystem woes
Avalanche is having challenges in its ecosystem as the layer 1 and layer 2 industries get more competitive. Data from numerous firms shows that the ecosystem has some challenges.
For example, Decentralized Finance (DeFi) is one of the top industries that Avalanche excelled in. However, data shows that the total value locked (TVL) in its ecosystem has fallen to about $825 million, the lowest level in more than a year.
This decline in dollar terms is mostly because the value of the AVAX token has been in a sustained downward trend. Still, the token has continued dropping in AVAX terms as it stands at about A825 million, down from its all-time high of over 12 billion AVAX.
A closer look at its DeFi ecosystem shows why this decline has happened in the past few months. The biggest DeFi dApps in its platform are AAVE, Benqi, GMX, and Trader Joe. AAVE sees most of its activity in Ethereum while GMX does well in its Arbitrum ecosystem.
Other statistics explain why the AVAX price is underperforming. Data by TokenTerminal shows that the number of daily active users has dropped by over 20% in the past 30 days to 21.6k. Similarly, the number of active developers has risen slightly to about 38 while code commits has been falling.
Avalanche’s market share in the non-fungible token (NFT) industry is a bit negligible as well. Data compiled by CryptoSlam shows that the total sales of Avalanche’s NFTs in the past 24 hours were just $20k. In the same period, Ethereum handled over $10 million worth of NFTs. This month, total sales of Avalanche NFTs has been less than $1 million.
Avalanche price prediction
The 4H chart shows that the AVAX crypto price has been in a bearish trend in the past few days. It has moved to the lower side of the ascending channel which is shown in red. Avalanche has moved below the 25-day and 50-day exponential moving averages (EMA).
AVAX has formed a bearish divergence pattern. Therefore, the coin will likely have a bearish breakout as sellers target the next key support at $15 followed by the month-to-date low of $13.85.
