Is AVAX a Hidden Gem in 2024?

• Avalanche (AVAX) has lost 11% in the past week as its poor start to the year continues, and the momentum that pushed it to an 18-month high at $48 continues to dwindle.
• However, its on-chain fundamentals have recorded strong growth, with daily active addresses and daily transactions continuing to surge as users seek low-cost Ethereum alternatives.

Since mid-January last year, Avalanche shot up from $15.8 to a new 18-month high of $48 in December. However, it has started the year poorly and in the past week, it has lost over 10% as its upward momentum continues to dwindle. Can AVAX reverse the trend and become one of this year’s hidden gems?

AVAX trades at $35.06 at press time, shedding 2.8% in the past day and 11.30% in the past week. A price rally from $33 to $41 at the start of the week proved unsustainable as the bears took control, and it has been downhill since.

Investors’ interest in the token soared in December when the trading volume consistently exceeded $1.5 billion. With the price dip has come a drop in volume, and in the past 24 hours, it stood at $487 million, close to 10% below yesterday’s numbers. At $12.8 billion, Avalanche remains in the top 10 cryptos, just ahead of Dogecoin.

But while the price and volume decline, the on-chain fundamentals remain strong. Since the year started, the daily active addresses and transactions have increased.

Other indicators are not as bullish. The relative strength index has dipped from 72.13, which indicates an asset is overbought, to 45, just above weak, showing investors are cooling off their interest in the project. The token’s open interest enforces this, rising by a measly 1.2% to $246 million.

The total value locked also shows a project struggling to rebound to its former glory. At $859 million at press time, Avalanche’s TVL is less than a tenth of its all-time high of $11.4 billion.

On social media, investors appear bearish, with weighted sentiment dipping in recent days, according to data by Santiment.

What Next for Avalanche (AVAX)?

While Avalanche was one of the big gainers in last year’s bull cycle, the network is setting itself up for long-term gains, not short-term speculation and hype.

Avalanche boasts one of the most scalable networks and has constantly been referred to as an Ethereum killer (although Solana founder Anatoly Yakovenko says the name insults Ethereum and any project using it). It relies on application-specific sidechains, employing parallel expansion similar to Cosmos or the Polkadot parachains.

A critical development in recent times has been the rise of ASC-20, the network’s version of the BRC-20 standard that introduced Bitcoin Ordinals on BTC. Since their inception last June, the network has recorded over 100 million inscriptions, proving that the market for NFTs on other chains is vast and untapped.

But it’s not just NFTs. ASC-20 inscriptions can cater to any token, from stablecoins to real-world assets.

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