Market intelligence platform IntoTheBlock explained why Avalanche (AVAX) could be a major network to watch in the cryptocurrency sector.
There has been consistently high avalanche activity lately
In new mail On X, IntoTheBlock discussed what two metrics related to network activity have looked like for Avalanche recently. The indicators in question are active addresses and new addresses.
The first of these, Active Addresses, measures the total number of AVAX addresses that engage in some type of transaction activity on the network each day. The measure 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 the cryptocurrency is experiencing.
The other metric, New Addresses, tracks the daily number of wallets that become active for the first time. This means that it tells us how many users make the first transfers on the blockchain.
New addresses are created when new investors join the network or old investors who sold previously return. They also arise when existing users create new wallets for privacy or reconsolidation purposes.
In general, all of this is happening simultaneously, which means it can be assumed that some net adoption of the cryptocurrency will occur when new addresses are on the rise.
Now, here’s the chart shared by the analytics company that shows the trend in the two Avalanche indicators over the past year:
Both of the metrics appear to have been at high levels in recent weeks | Source: IntoTheBlock on X
From the chart, it appears that Avalanche’s new addresses and active addresses were following a general downward trajectory through 2024, until there was a sharp rebound in activity in December, as metrics rose.
This month, the indices saw even greater increases, a possible sign that cryptocurrency adoption is accelerating and investors are becoming increasingly involved in the network.
Not only are the recent highs in the index higher compared to last year, but they are actually also higher than the peak of the 2021 bull market. “This positions the @avax network as a major network to watch, in case more users enter the cryptocurrency market,” IntoTheBlock notes. .
Historically, adoption has proven constructive for cryptocurrencies, but the effects may only become evident in the long term. On the other hand, high activity tends to reverse immediately, as a large number of users making moves provides an ideal environment for volatile moves to occur. However, such fluctuations do not have to be bullish.
Avax price
At the time of writing, Avalanche is trading around $40, up more than 8% over the past seven days.
Looks like the price of the coin has been on the rise recently | Source: AVAXUSDT on TradingView
Featured image by Dall-E, IntoTheBlock.com, chart from TradingView.com