Avalanche Defies Market Slump With Explosive Network Growth — What’s Next for AVAX?

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• Avalanche attracted $135M in monthly net inflows despite weak market sentiment.
  
• Active addresses surged 242%, signaling strong on-chain engagement.
  
• Upside liquidity between $10–$12 could trigger increased volatility.

Avalanche (AVAX) is flashing signs of life beneath the surface of a quiet crypto market. While broader activity cooled on 10 February, the Avalanche ecosystem moved in the opposite direction, pulling in $135 million in monthly net inflows and ranking among the top blockchains for fresh capital.

The divergence between price weakness and rising on-chain activity is now raising a key question for traders: Is AVAX quietly building a base for a larger move?

Avalanche Leads Inflows Despite Market Slowdown

Data from DeFiLlama shows Avalanche recording $60 million in weekly inflows and $7 million in daily net inflows, placing it fourth across major chains on both timeframes. That level of capital movement stands out in a market defined by caution and reduced risk appetite.

What makes the trend notable is timing. These inflows arrived during a period when sentiment across crypto remained fragile. Instead of retreating, capital continued rotating into the AVAX ecosystem — a signal that investor interest has not disappeared.

Inflows alone don’t guarantee upside. But sustained capital entering a network during weakness often reflects longer-term positioning rather than short-term speculation.

Active Addresses Explode to Record Highs

On-chain engagement tells an even stronger story. Avalanche’s active addresses have jumped more than 242% since early January, surpassing all prior 2024 levels. Monthly active addresses climbed past 1.6 million, while daily C-Chain activity recently touched new highs between 1.6 and 1.7 million.

This surge happened even as AVAX price retraced sharply from its October peak, falling more than 80% before stabilizing near the $8.85–$11.86 support range.

In simple terms, usage expanded while price declined — a classic case of network growth diverging from market sentiment. Historically, such disconnects have sometimes preceded structural reversals, though confirmation remains essential.

AVAX Price Holds Critical Support as Indicators Turn

From a technical standpoint, AVAX appears to be stabilizing after heavy selling pressure. Sellers showed signs of exhaustion near the $8 level, and downside momentum began to fade.

Momentum indicators are hinting at potential change. The Relative Strength Index (RSI) remains deeply oversold, while the MACD has flashed a bullish crossover near support. These signals often suggest a local bottom may be forming — but they are not guarantees.

For a sustainable recovery, trading volume must increase meaningfully. Without strong participation, any bounce risks becoming another failed rally.

Liquidation data shows downside liquidity largely cleared before 10 February. Now, upside liquidity is concentrated between $10 and $12 — directly above current price levels.

From a market mechanics perspective, such zones often act like magnets. Market makers frequently push prices toward liquidity pockets, increasing the probability of volatility in the short term.

Whether that move becomes the start of a broader expansion for Avalanche depends on follow-through. For now, liquidity sits overhead, waiting to be tested.

Also Read: Why Institutions Are Flocking to Avalanche While XRP Faces Heavy ETF Outflows

Avalanche’s $135 million inflow, record-breaking active addresses, and stabilizing technical structure suggest the network is far from dormant. Real usage is rising even as price remains depressed — a combination that often precedes major turning points.

Still, confirmation is key. Without stronger volume and sustained momentum, optimism may prove premature. AVAX sits at a crossroads — structurally supported, technically compressed, and positioned beneath a key liquidity zone.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.