Avalanche (AVAX) Is Down 94% In Revenue

The crypto sector experienced a series of ups and downs since the start of 2022, but some projects took a serious beating, like Avalanche. The promising Ethereum alternative started the year with a high of $116 per AVAX token, but currently, AVAX is worth only $16.17 per token.

It turns out that the bearish momentum is intensifying for some cryptos, despite the majority of the sector moving sideways. Indeed, the latest price drop for Avalanche dipped the token below $16, but massive trading volumes pushed the token above the mark.

The reasons for the free fall

According to a report from crypto intelligence company Messari, the network’s value increased by 3%, which is in stark contrast with the 94% price dip. Avalanche’s daily transaction volume and transaction fees have declined by 65.5% and 76.2%, respectively, despite Messari highlighting the network’s expansion beyond DeFi and into NFT activity, real-world assets (RWA), GameFi, and more.

Messari delved deeper into the metrics, stressing that the network’s subnets are also putting downwards pressure on revenue and short-term network value, with Messari questioning whether subnets negatively impact the utility of the $AVAX token and C-Chain value.

Furthermore, Avalanche released its DeFi incentive program Avalanche Rush, which decelerated in Q3. The interest fall pushed TVL values down 27% in both USD and AVAX quarter-over-quarter (QoQ). The intelligence company added that “as TVL reverts back to its mean, it reflects a sustainable utility instead of a value catalyzed purely by incentives.”

AVAX’s non-fungible token (NFT) market also collapsed with NFT sales volume and unique buyers plummeting by more than 88% and 34%, respectively. Unique sellers, on the other hand, skyrocketed by 25%.

„While the quantitative narrative of Q3 was relatively unexciting, the qualitative narrative was filled with building the @avalancheavax ecosystem and remaining laser-focused on executing its growth strategy.“ Messari added.

Is the crisis going to end?

Technical analysis figures are showing that the bulls and bears have been battling for control of the market, but the bears have been able to take control in the last few days. The 50 SMA is currently below the 200 SMA, charting the path of least resistance - down. The 50 SMA is currently at $16.98 and the 200 SMA is at $16.70.

The RSI is currently sitting at 41.09, which shows that the market is balanced in terms of buying and selling.