Fundamental Support for Rally in Doubts
Cryptocurrency Avalanche, which is widely known as ‘AVAX’, has been on a rally of price surge since when the coin entered 2023.
However, the coin’s existing rally requires a ‘sustained uptick’ for it to ensure ‘sustainability’ for keeping the bullish momentum going.
Most importantly, this ‘sustained uptick’ is desperately needed in AVAX’s decentralized finance (DeFi) ecosystem. If the much-needed sustainability is achieved, then the rally is likely to become strong and prolonged.
However, the problem is that AVAX’s rally seems doubtful.
AVAX’s Rise
As of now, the AVAX coin has been trading hands at $20.57 with the price index indicating further gains in the long term.
The year 2023, kicked off meticulously for AVAX, and by the end of January 2023, the coin’s value had surged by approximately 98%.
Currently, AVAX’s supporters are in doubt whether the rally would be able to prolong throughout the month of February or not.
What is certain is that AVAX easily outperformed Bitcoin in terms of gains since 1st January 2023 to date. Within this timeframe, Bitcoin’s value has surged by at least 40% i.e. approximately 58% less than that of AVAX.
Similarly, AVAX also managed to outplay lead cryptocurrencies in terms of its year-to-date gains against Bitcoin and Ethereum together.
Both, Bitcoin and Ethereum, are up by roughly over 40% collectively since the year 2023 had begun. Their present market values are hovering above $23,218 and $1,673.
AVAX’s Partnership with Amazon Boosted the Rally
One of the major reasons behind AVAX’s rally push is the coin’s recently developed partnership ties with the online retail giant, Amazon.
AVAX’s network announced on 11th January 2023, that it had entered into partnership arrangements with Amazon.
Under the partnership, Amazon will allow Avalanche blockchain access to its service known as ‘Amazon Web Services (AWS)’. Through the AWS, Avalanche blockchain would be able to employ and supply nodes to its network.
The purpose behind obtaining AWS access is to substantially increase the interaction of corporate entities and government into the Avalanche blockchain.
This fact was further endorsed by Ava Labs, which is an essential component of Avalanche’s network.
Ava Labs commented that the partnership will subsequently boost the usage of Avalanche’s blockchain by the government sector and enterprises.
The existing rally is hence attributed to Avalanche’s announcement of business ties with Amazon.
It is the view of some analysts that AVAX’s existing rally is rather fictional which has been boosted because of 11th January’s announcement.
They have opined that the fundamentals in the existing rally are lacking and hence it cannot be relied upon for the longer term.
Missing Fundamental Explained
Soon after 11th January’s announcement, a subsequent rise was also witnessed in AVAX fees apart from the quick rise in the coin’s value.
AVAX’s fee has gone past $31,218 which was recorded to be the network’s year-to-date high.
Though fee collection is rising significantly, it is still less than Ethereum and Binance Chain, which are the leading EVM-compatible blockchains.
Secondly, the number of active blockchain addresses as well as users for the AVAX blockchain are still on the lower side. Consequently, the number of transactions that the network is executing is also minimum.
Health-wise, the AVAX blockchain is evidently weak as it hasn’t been able to boost user interaction or activate addresses as well as transactions.
On the contrary, the most active users could be seen using Avalanche’s popular DApps, especially Aave.
Based on these reasons, experts are not only doubting but also challenging the prolonging and the very existence of AVAX’s present rally.