Avalanche (AVAX) Approaches Noteworthy Support After Recent Dip

Avalanche (AVAX) was recently ranked 11th among cryptocurrencies by market capitalization. As the year progresses, there is speculation on whether AVAX can leverage its growing transaction count to ascend into the top 10 or if market pressures will drive it down.

An analysis of the network performance reveals mixed results. For instance, the blockchain has experienced positive growth in terms of daily transactions.

According to DeFiLlama, daily transactions reached a 10-month high of 586,650 on 8 January, indicating healthy growth in network utility.

While strong daily transactions may suggest that the network is on the right trajectory, to fully capitalize on growth opportunities, it requires more than just high transaction counts. It also needs positive TVL growth and stablecoin count.

DeFiLlama data shows that both TVL and stablecoin market cap on the Avalanche network have struggled to maintain positive growth.

For perspective, Avalanche had a TVL of $1.375 billion, which was about 10% of its ATH achieved in December 2021.

Liquidity in the Avalanche network has also seen a decline. Stablecoin market cap peaked at $4.68 billion in March 2022. It dropped to $1.051 billion by the end of November 2023.

However, it recovered to reach $2.43 billion in 2024. As 2025 began, it showed significant outflows.

According to DeFiLlama, Avalanche’s stablecoin market cap saw a decline of about $1 billion in the last 10 days. During the same period, its TVL also decreased by around $140 million.

AVAX approaches key support after recent dip

It remained to be seen whether the mixed network performance statistics – growing transactions and declining stablecoins – would impact AVAX’s price.

The cryptocurrency’s price action appeared to be moving in line with the prevailing market conditions.

At press time, AVAX was valued at $36.46 after declining by 18.7% since the beginning of the week.

According to the price chart, AVAX was approaching a short-term support zone around the $35 price range. This zone could potentially provide an opportunity for a short-term recovery.

To gain further insight into the state of demand, an analysis of historical concentration data may be useful.

IntoTheBlock data showed that whale holdings had increased from 26.53 million AVAX (24.42%) on 1 January to 25.59 million AVAX (24.35%) on 8 January.

The most significant shift was from the investor category, which held the largest supply of AVAX. Data revealed outflows from this category.

At the beginning of the year, investor holdings were 49.59 million coins (45.65%). By 8 January, they had decreased to 47.06 million coins (47.78%).

Read Avalanche’s [AVAX] Price Prediction 2025–2026

Furthermore, retail holdings also decreased from 32.51 million AVAX (29.93%) to 32.43 million AVAX (30.87%) during the same period.

The historical concentration data seemed to indicate outflows from all older categories, suggesting that investors were leaning towards caution.