Key Points:
- Avalanche dropped 8% in the past 24 hours despite positive on-chain signals.
- Long positions and funding rates remain bullish.
- On-chain activity cooled off from monthly highs.
Avalanche (AVAX) has climbed 22% this month, according to CoinMarketCap. This was fueled by a 168% spike in network activity, driven by real-world adoption with VanEck’s tokenized fund debut on Avalanche.
Moreover, on the technical front, AVAX went through a major tech upgrade on April 8 called the Avalanche Octane. Avalanche Octane is a major upgrade that makes transactions cheaper and more predictable by letting validators adjust gas limits based on demand. This helps the network stay fast and efficient, even during busy periods.
Although on May 13, Avalanche’s Explorer services briefly went down due to a frontend/backend issue but were resolved within 45 minutes, not causing any significant downside on the price.
However, despite achieving strong monthly growth and all-time high active addresses, AVAX has dropped 8% in the past 24 hours as key on-chain metrics begin to cool.
AVAX’s Shows On-Chain Activity Cooling
Avalanche’s network saw two sharp spikes in transaction fees, with the most recent peaking near $30K in mid-May. However, since then, total fees have dropped to around $17.9K, signaling a notable cooldown in activity from monthly highs.
Daily transactions on Avalanche recently peaked at 12.43 million. However, activity has since cooled slightly, with total transactions dipping to 11.89 million, signaling a mild pullback in on-chain momentum.
Avalanche’s active addresses recently spiked above 400,000, driven. The activity has since pulled back down sharply, dropping to around 100,000, signaling a short-term cooldown in user participation following a period of peak engagement.
Avalanche Q2 Activity Surges Past Previous Quarters
Midway through Q2, Avalanche has already outpaced prior quarters in key metrics. Daily active addresses (+69%), Average daily transactions (+290%), and new contracts deployed (+16,000%) all surged in comparison to Q2 2024 already. Upgrades like Avalanche Octane likely played a key role in boosting efficiency and network usage, pointing to long-term ecosystem strength.
A 16,000% surge in new contracts signals developer confidence, more apps being built, and growing long-term adoption on Avalanche.
Despite strong bullish signals, including a positive funding rate and more long positions than shorts according to Coinglass, Avalanche (AVAX) has dropped over 9%, likely due to profit-taking and broader market volatility.
AVAX is set for token unlock of 1.7M AVAX ($39.6M) on May 17 according to Messari. While recent on-chain growth (e.g., contract deployments, transactions) points to long-term network strength, the current price action reflects near-term caution, especially as some metrics like active addresses and transaction fees have cooled from their highs.
