The market intelligence platform IntoTheBlock has explained why Avalanche (AVAX) could be a key network to watch in the cryptocurrency sector.
Avalanche Has Been Witnessing Consistently High Activity Recently
In a new post on X, IntoTheBlock has discussed about how two network-activity related metrics have been like for Avalanche recently. The indicators in question are the Active Addresses and New Addresses.
The first of these, the Active Addresses, measures the total number of AVAX addresses that are participating in some kind of transaction activity on the network every day. The metric includes both senders and receivers in its count.
The total unique number of active addresses can be considered equivalent to the unique number of users visiting the blockchain, so the indicator basically tells us about the level of traffic that the cryptocurrency is witnessing.
The other metric, the New Addresses, tracks the daily count of the wallets becoming active for the very first time. That is, it tells us about how many users are making their first transfers on the blockchain.
New addresses are generated whenever new investors join the network or old ones who had sold earlier return. They also arise when existing users create new wallets for privacy or reconsolidation purposes.
In general, all of these are occurring at once, meaning that some net adoption of the cryptocurrency could be assumed to be happening whenever the New Addresses registers a spike.
Now, here is the chart shared by the analytics firm that shows the trend in the two indicators for Avalanche over the past year:
Both of the metrics appear to have been at high levels in recent weeks | Source: IntoTheBlock on X
From the graph, it’s apparent that the Avalanche New Addresses and Active Addresses had both been following an overall downwards trajectory during 2024, until a sharp revival in activity occurred in December, where the metrics spiked.
This month, the indicators have seen even larger spikes, a potential sign that the adoption of the cryptocurrency is accelerating and investors are becoming increasingly engaged on the network.
The recent highs in the indicator have not only been higher as compared to last year, but in fact also higher than the peak of the 2021 bull market. “This positions the @avax network as a key one to watch, should more users enter the crypto market,” notes IntoTheBlock.
Historically, adoption is something that has proven to be constructive for cryptocurrencies, but the effects may only become apparent in the long term. High activity, on the other hand, tends to reflect immediately, as a large amount of users making moves provides for the perfect environment for volatile moves to occur in. Such volatility, however, isn’t necessary to be bullish.
AVAX Price
At the time of writing, Avalanche is trading around $40, up more than 8% over the last seven days.
Looks like the price of the coin has been on the rise recently | Source: AVAXUSDT on TradingView
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
