Avalanche (AVAX) Recovers From User Interest Decline

Cryptocurrencies were feeling the heat this week after crashing 2 times in one month. Every coin experienced some form of decline. Avalanche (AVAX) saw its value drop 28.77% in just 4 days.

The crypto market is volatile and it has been a concern for authorities worldwide. In May 2022, the situation got worse as more people were losing money in this space due to wild fluctuations that weren’t even based on any real value proposition but pure hype alone.

Avalanche price action | Source: TradingView – AMBCrypto

It has since recovered by over 19.5%, but looking at the big picture, it is not likely that this will have any effect on Avalanche’s recovery.

In a dramatic turnaround, AVAX has been on an uninterrupted downtrend for the past seven months. The coin’s value fell almost 82% from its peak back in November to date as users mass abandoned ship.

The recent decline in the number of people using Avalanche is a major concern for its future. Up until December and January, it recorded anywhere from 750k-800K monthly active users on-chain. This figure dropped by almost 120 thousand by the next month; surprisingly only 600k users participate in transactions which caused this month’s change too.

Avalanche monthly active users | Source: Avalanche

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Last month, despite the decline in users and an increase of 30 million transactions for May compared to April’s numbers (31.19 million), Avalanche witnessed a total number close too 600k investors conducting business with them.

Avalanche monthly transactions | Source: Avalanche

The value of Avalanche’s DeFi protocols has also fallen since December 2021. Back then, the network’s total TVL was about $13.7 billion; however, today only $4.16 billion are left locked up in these crypto wallets.

Avalanche TVL | Source: DeFi Llama – AMBCrypto

The market crashes are what caused the decline in investment for Avalanche, but it’s unlikely that this will be enough to bring them back up. Hopefully, investors’ activity can keep things afloat until then.