AVAX Price Drops 15% in Just One Month Despite Prestigious Partnerships

AVAX, the native token of the Avalanche network, has experienced a price drop of 15.14% from the previous month, according to CoinMarketCap. On August 20, AVAX traded hands for US$10.79 ($16.78) but as of the time of writing, the price has dropped to US$9.14 ($14.21).

The drop below the US$10 ($15.55) mark indicates the lowest price AVAX has seen in over two years. Whether investors consider this to be a discounted price or a continued downtrend, AVAX has not traded at this level since January 2021. This contrasts with the trend of other cryptocurrencies like Bitcoin, Ethereum, and XRP, which have been moving sideways. On the other hand, coins like Cardano’s ADA, Solana’s SOL, and Polkadot’s DOT, have joined AVAX in its slow but steady decline.

While there could be many reasons for the divergent trajectories, such as Bitcoin’s increasing dominance and XRP’s generally stronger sentiment following the ruling that it is not a security, some projects are weighed down by specific factors. Solana, for instance, has faced network outages in the past, while both Cardano and Polkadot are undergoing transformational stages, which inherently entail varying degrees of uncertainty.

Crypto Projects Facing Challenges During Prolonged Bear Market

While some blockchains are experiencing more substantial difficulties than others, there is an overall decrease in user activity in crypto, likely influenced by the prevailing gloomy market conditions and the persistently high inflation environment.

While for AVAX a drop in users is certainly a factor, data from DeFi Lama shows there is also the decline in total value locked (TVL). Avalanche’s current TVL stands at US$496.01 million ($770.52 million), marking a sharp decline from the peak of US$11 billion ($17 billion) it reached in December 2021.

Avalanche Continues to Add Value and Use Cases

In January 2023, Avalanche announced a strategic collaboration with Amazon Web Services, in a bid to enable governments and businesses to gain easy access and exposure to blockchain. The primary goal of this partnership is to promote and advance the adoption of blockchain technology in various sectors, specifically targeting enterprises, institutional users, and government organizations.

The Founder and CEO of Ava Labs, Emin Gün Sirer, said in a Medium post: “I’m proud that we’ve implemented a protocol that can accommodate millions of participants with near-instant finality. Our work with Amazon can accelerate the positive impact of Avalanche.”

And, in May 2023, Avalanche partnered with Alibaba Cloud to provide millions of users with a metaverse deployment. In the so-called Cloudverse, businesses can create their own metaverse space, leveraging Avalanche’s scalability and speed.

While the overall market conditions appear uncertain at the moment, Avalanche appears to continue to build on solid foundations. It remains to be seen how it will perform in the next bull run.