Avalanche Deemed ‘Undervalued’ Before Notching 79% Weekly Gain, Say Analysts

During a tumultuous cryptocurrency market, Avalanche (AVAX) has not only weathered the storm but has surged with an exceptional 79% weekly gain, standing resilient while other major digital assets faced declines. Priced at $40.94, AVAX has captured the attention of analysts who attribute its remarkable performance to a combination of strategic partnerships, increased trading volumes, and a substantial rise in Total Value Locked (TVL).

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Market Performance and Partnerships

As Bitcoin (BTC) and Ethereum (ETH) grappled with declines, data from CoinGecko showed that AVAX exhibited a contrasting trend by gaining 13.6% On December 11. Ryan Mcmillin, Chief Investment Officer at Merkle Tree Capital, sheds light on the factors driving AVAX’s increased enthusiasm. Major financial institutions, including JPMorgan and Citi, have partnered with the Avalanche Foundation for Real-World Asset (RWA) tokenisation initiatives, contributing to the 79% weekly gain. 

This collaboration has sparked positive developments, including a surge in daily transactions from $200,000 to an impressive $4.5 million, coupled with an upward trajectory in daily active addresses.

Fundamental Strengths and Market Comparison

Over the past three months, the AVAX network’s TVL has experienced a robust 82% surge, skyrocketing from $490 million to $894 million as of September 12. In addition to the 79% weekly gain, AVAX’s token trading volume has increased by a staggering 2436%, as shown by DefiLlama data. 

Chief Investment Officer at Apollo Crypto, Henrik Andersson, revealed that AVAX has been undervalued by broader market standards. Comparing it to Solana (SOL), he pointed out that a few weeks ago, AVAX boasted a higher TVL with only a quarter of SOL’s market cap. 

Although AVAX’s market cap now stands at half of SOL’s, Andersson expresses confidence in certain altcoins, including AVAX. He believes AVAX is a potential catalyst for a market shift in 2024, foreseeing the possibility of outperforming BTC. Andersson’s insights highlight the potential of AVAX, potentially signalling a lucrative investment opportunity, especially considering its recent 79% weekly gain.

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Analyst Insights and Inflows

James Butterfill, Head of Research at CoinShares, stressed the significant price declines witnessed by major cryptocurrencies like BTC and ETH during the week in a crypto fund flows report on December 11. However, he pointed out that SOL and AVAX bucked the trend, attracting inflows of $3 million and $2 million, respectively. This performance resulted in an impressive 79% weekly gain for AVAX and made SOL and AVAX “Firm favourites” in the altcoin space.

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Closing Words

Avalanche’s recent surge defies market expectations while underscoring its resilience and robust fundamentals. The strategic partnerships with industry giants, increased trading activity, and substantial growth in TVL mean AVAX could become a formidable player in the cryptocurrency industry. Analysts suggest that AVAX’s performance may signal a shift in how altcoins are evaluated, potentially marking a turning point in the market. 

As the crypto industry continues to evolve, the trajectory of AVAX, influenced by strategic alliances and market dynamics, will remain a focal point for investors and enthusiasts.