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- Avalanche is seeing an impressive boost in its Non-Fungible sector.
- Notable headwinds lay ahead for AVAX but bulls see a promising year ahead.
Avalanche (AVAX), a decentralized platform has recently witnessed a surge in Non-Fungible Token (NFT) activity, with active addresses experiencing notable growth. This boom has led to investors questioning whether AVAX can ride the green wave to sustained success.
NFT Boom on Avalanche
Crypto Researcher, Emperor Osmo noted in a post on X that the growth in active addresses on Avalanche’s NFT network signaled heightened engagement with the platform. Notably, blue-chip collections like Dreamheadz and Dokyoworld have played a major role in attracting interest and driving this surge in NFT activity.
The platform’s compatibility with Ethereum Virtual Machine (EVM) has also facilitated the seamless migration of existing projects, further fueling the NFT boom. Excitingly, the positive momentum in the NFT sector has the potential to positively impact the overall health of the Avalanche network, creating a dynamic and thriving ecosystem.
However, amidst this NFT boom, certain challenges in the Decentralized Finance (DeFi) space on the Avalanche network have come to light. Notably, Total Value Locked (TVL) and Decentralized Exchange (DEX) volumes on the network experienced a decline in recent weeks, raising concerns about the protocol’s resilience amid potential negative implications.
Despite these challenges, Trader Joe, a prominent DEX operating on the Avalanche network, has shown remarkable growth. With a 13.7% increase in activity and a staggering 134.6% surge in revenue over the past month, Trader Joe’s performance stands out as a positive indicator for Avalanche.
Whether Trader Joe can sustain and further boost DEX volumes on the network remains to be seen.
AVAX Token’s Uptick and Implications
In terms of the AVAX token, a noteworthy development is the burning of 2 million AVAX in 2023, marking a doubling of the previous total within a year. This burning mechanism has implications for the token’s scarcity and may impact its value over time.
Notably, AVAX’s native token has experienced a remarkable uptick. Currently trading at $35.98, the token demonstrates a 4.49% increase in the past 24 hours. Additionally, AVAX’s market cap has climbed to $13.1 billion, with trading volume rising by 13% to $978.7 million.
AVAX bulls are expressing confidence in a bullish year, fueled by the network’s developments and the broader positive trend set by Bitcoin, along with the anticipation of potential Bitcoin Exchange-Traded Fund (ETF) approvals.
On-chain data reveals that 96,140 addresses have acquired 10.53 million AVAX at an average price of $39.61. Investors are optimistic about a rebound, but breaking the $40 resistance level might prove challenging as some investors look to take profits on the way up.
On the flip side, 515,630 holders bought 10.53 million AVAX at the maximum price of $34.43, potentially holding out against downward pressure. With targets set at $40 and $45 in sight, the long-term target for AVAX now stands at $50. The path ahead for AVAX hinges on its ability to navigate challenges in the DeFi space while capitalizing on the momentum in the NFT sector to achieve these bullish price targets.
