AVAX Token Slumps, What’s Causing the Avalanche?
The AVAX native token for the layer-1 blockchain Avalanche is facing significant challenges, dropping more than 10% in a single weekend and reaching its lowest level since December 2023.
- The token plunged from $27.87 to a six-month low of $24.92 within 24 hours, as reported by CoinGecko.
- Over the past month, the asset has tumbled by a staggering 37% amidst the broader crypto market pullback affecting altcoins.
Market Speculation and Analysis
Questions and speculations have arisen within the crypto community regarding the reasons behind AVAX’s sharp decline:
- Twitter user ‘Crypto Mechanic’ raised concerns about AVAX breaking its yearly low.
- Another user, ‘The Crypto Monk,’ compared the situation to the elusive hype surrounding Cardano.
“The AVAX hype is so far gone this cycle… It looks like nothing will save it from becoming Cardano 2.0,” commented ‘The Crypto Monk.’
Adding to the confusion, Dr. Martin Hiesboeck, head of research at Uphold, expressed bewilderment at the ongoing price decline of AVAX, stating that such negative momentum contradicts the asset’s growth trajectory when compared to other projects in the space.
Market Movements and Analysis
Additional market insights shed light on the situation:
- Blockchain analyst ‘ZachXBT’ noted significant movements of AVAX by a whale entity to various exchanges, leading to a sharp market cap decrease and a drop in ranking.
- The massive transfers have pushed AVAX below the $10 billion market cap threshold, landing it in the fourteenth position on CoinGecko behind Shiba Inu and Tron.
This drastic shift comes despite Avalanche being at the forefront of crypto discussions due to real-world asset tokenization and notable partnerships established throughout the year.
Market Pain Spreads to Altcoins
The wider crypto market is witnessing a correction, with altcoins experiencing significant losses:
- Total market capitalization has dropped by 15% from its 2024 peak and now stands 20% lower than the all-time high reached in 2021.
- Altcoins like Cardano (ADA), Chainlink (LINK), Near Protocol (NEAR), Polygon (MATIC), and Fetch.ai (FET) are also grappling with substantial declines, mirroring AVAX’s struggles.
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