Avalanche's Price Drops 1.13% Amid Selling Pressures, TVL Falls 3.26%

Avalanche [AVAX] experienced a slight price decline of 1.13%, settling at $23.66 over the past day. Despite this drop, there is optimism that the cryptocurrency could overcome current selling pressures and achieve significant price gains. However, the market still sees active selling, with liquidity outflow gradually increasing. This outflow is evident in the total value locked (TVL) across Avalanche protocols, which decreased by 3.26%, from $1.519 billion to $1.469 billion, with $50 million worth of AVAX sold. Additionally, the decentralized exchange (DEX) trading volume shrank from $216.5 million to $130.3 million, indicating a decline in demand on decentralized exchanges.

In contrast to the liquidity outflow, Avalanche recorded a substantial surge in activity over the past 24 hours. Active addresses jumped by 221%, and the transaction count rose by 109%. This surge suggests that more investors are joining the network and actively transacting. Notably, 89.94% of these transactions were associated with OpenSea, a non-fungible token (NFT) marketplace. This trend aligns with the broader growth in NFT applications, which have seen a 78.1% increase in the last 30 days. The positive impact of this activity is reflected in Avalanche’s fee generation, which rose from $19,500 on May 11th to $24,300 at the time of reporting. This increase in fee generation confirms the high usage of the blockchain, which is crucial for the asset’s price growth. However, for AVAX to sustain its upward momentum, demand must return not just on-chain but also across trading and liquidity channels.

Three key factors will determine whether AVAX can hold the $25 mark. First, the continued growth in NFT applications could drive AVAX’s price upward. Second, a return of demand on decentralized exchanges and an increase in liquidity inflow are essential for sustaining upward momentum. Lastly, overcoming the current selling pressures and maintaining high on-chain activity will be crucial for AVAX’s price stability and growth. If these factors align favorably, AVAX has the potential to hold the $25 mark and achieve further price gains.