Crypto project Avalanche (AVAX) recently saw an exceptional price performance — one that even managed to lead it to a new all-time high. The project has had multiple price surges in 2021, with the first notable one being in mid-February of this year. This one led it to $60 but was quickly followed by a correction that did not stop until the project reached $25 around early March.
Finally, in mid-May, a market-wide crash caused its price to start dropping more seriously, not due to a correction, but due to a bear market, which eventually led it to its new bottom at $10. However, in late July, AVAX prices started to climb again, starting a trend that lasted until this very day. Over the last week, however, AVAX’s price growth reached entirely new proportions, leading the coin to a new all-time high which it reached earlier today, September 17th.
What is Avalanche (AVAX)?
Avalanche (AVAX) is a blockchain project that provides infrastructure for decentralised finance (DeFi) applications, digital assets, trading platforms and similar services. It allows anyone who wants to produce their blockchain, digital asset or cryptocurrency on the decentralised platform without developing a new blockchain. The Avalanche project was created with Cornell University Professor Emin Gün Sirer, CEO of Avax Labs, in partnership with Kevin Sekniqi and Maofan Yin. The Avalanche network and Avalance AVAX were launched in September 2020. The Avalanche project allows anyone who wants to produce their blockchain, digital asset or cryptocurrency on the decentralised platform without developing a new blockchain.
Five Reasons for Avalanche (AVAX)’s Growth
1. A growing number of developers
Avalanche (AVAX), like many other development platforms in the crypto industry, saw natural growth over the last few months due to the growing number of developers. While Ethereum still remains a dominant force in the crypto industry, its high gas fees have been a problem for a very long time now, and it seems that most devs have had enough of it.
This is why they have started seeking out new opportunities, and Avalanche ended up being one of them, alongside Solana, BSC, and even Cardano, which just launched its smart contracts five days ago, on September 12th.
2. A Massive DeFi Investment
Likely the biggest reason for Avalanche’s growth is the recent announcement that the project intends to invest $230 million into its DeFi sector through various means, such as grants, token purchases, tech investments, and more. The announcement was published this Wednesday, September 15th, which is when AVAX price started surging again, interrupting a correction that started a few days earlier, and which followed a rally that took it to $64.17.
The coin’s price chart shows this switch in trends perfectly, with the price just hitting $50 as the correction took place, before starting a rapid surge up, following this great news for its DeFi sector.
3. The Altcoins’ Time to Shine
Another reason why Avalanche may be performing so well is the fact that Bitcoin has started losing the investors’ interest. Many have started distancing themselves from the coin in favor of the altcoin market, which is why a number of tokens started performing very well, while BTC price continues to struggle to breach $50k, and it fluctuates between this resistance and its support at $45k. Even at the time of writing, BTC still sits at $47.8k, with its price being only 1.75% up in the last 24 hours.
4. New Partnerships
it is also worth noting that Avalanche recently saw an entire series of new partnerships and integrations, all of which came as very positive announcements, putting investors in a state of constant excitement and optimism. With the project under the spotlight — especially as its NFT ecosystem started seeing a lot of interest after the partnership with Topps — many have rushed to obtain the coins and in doing so, helped its price grow.
It is also worth mentioning that the Aave community is currently running a vote to see whether investors want to see the coin arrive at Avalanche’s network. If the vote results in a positive decision, Avalanche’s TVL is likely to skyrocket, as AAVE is going to migrate from Ethereum’s network to AVAX’s.
5. TVL Growth
As mentioned, there are plenty of investors out there who are seeking new opportunities and are scouring the crypto industry for them at all times of day and night. These people and businesses are keeping an eye on numerous metrics, technical indicators, and alike, and they have likely noticed that Avalanche’s TVL has started to grow rapidly ever since August 19th.
By September 16th, Avalanche’s TVL hit $1.17 billion, which is a new record for the project, which many likely took as an indication of a growing price. And, since the best investors are going after projects that are about to see surges — not those that are already growing — they have likely started buying AVAX in hopes of riding this price growth for as long as possible, causing the very price growth along the way.
Bottom Line
Judging by everything seen so far, Avalanche seems like a great investment opportunity for long-term investors. In the short term, however, its price remains very unstable, with significant growth and drop now seen on a daily basis. Typically, after coins hit an ATH, they go into a lengthy correction mode, which might not make the best time for investing. However, the AAVE community’s vote could turn things around and send Avalanche sky-high, if the decision whether or not to migrate AAVE to its network ends up being a positive one.
