Avalanche (AVAX) Shows Mixed Signals With Rising TVL and Resistance Test Amid Weak Network Activity

• AVAX’s DeFi total value locked reached $1.5 billion, reflecting improved transaction speeds and reduced fees post-upgrade.

• Derivatives open interest climbed over 15% to $835 million, indicating heightened speculative activity.

• Social dominance fell to 0.419% while weighted sentiment improved slightly, showing cautious optimism among traders.

Avalanche’s AVAX DeFi TVL soars 40% post-Octane upgrade; derivatives and price test resistance amid mixed social and network signals. Stay updated with COINOTAG.

How Has Avalanche’s Octane Upgrade Impacted AVAX DeFi TVL?

The recent Octane upgrade has significantly boosted Avalanche’s DeFi ecosystem, with total value locked (TVL) rising nearly 40% quarter-over-quarter to $1.5 billion. This surge reflects enhanced transaction speeds, lower fees, and a smoother user experience, attracting more capital into AVAX-based protocols. The upgrade’s technical improvements have been pivotal in driving this growth, positioning Avalanche as a competitive player in the DeFi space.

What Does the Increase in Derivatives Open Interest Indicate?

Open Interest in AVAX derivatives has surged by over 15% in the past week, now totaling $835.44 million. This rise suggests increased speculative interest and confidence among traders. While this can amplify the ongoing price rally, it also introduces potential volatility risks if leveraged positions unwind. The sustained growth in Open Interest, however, points to a bullish sentiment that could support further upside if matched by spot market demand.

Source: CoinGlass

Will AVAX Break Past Its Current Resistance Level?

AVAX has formed a classic double bottom pattern and recently broke above its descending trendline, now testing the $26–$28 resistance zone. This area has historically served as a strong barrier. A decisive close above this level could confirm a trend reversal and open the door for further gains. Conversely, failure to break through may lead to a pullback and retest of lower support levels.

Strong buying pressure from DeFi inflows and derivatives traders will be crucial for a clean breakout in upcoming sessions.

Source: TradingView

Why Is AVAX Sentiment Improving Despite Weak Social Engagement?

AVAX’s social dominance has declined to 0.419%, indicating reduced chatter and hype around the token. However, weighted sentiment has edged up to +0.115, reflecting a cautious but growing optimism among traders. This divergence suggests that while institutional and experienced traders are gaining confidence, broader retail interest remains subdued. Without increased social buzz, the rally’s reach may be limited.

Source: Santiment

Can AVAX Sustain Its Rally Amid Declining Network Activity?

Network metrics show a 33.93% drop in new addresses and over 10% decline in active addresses over the past week. This contrasts with the rising price and TVL, suggesting the rally is driven more by capital rotation than organic user growth. For long-term strength, Avalanche must boost user onboarding and engagement; otherwise, momentum may fade once the upgrade-driven excitement subsides.

Source: IntoTheBlock

Overall, AVAX demonstrates strong technical and fundamental signals, including rising TVL, bullish price action, and growing trader confidence. Yet, subdued network growth and social engagement may constrain further gains. A successful breakout above resistance combined with renewed user activity could validate the rally and set the stage for higher price targets.

Frequently Asked Questions

What is driving the recent surge in Avalanche’s DeFi TVL?

The Octane upgrade improved Avalanche’s transaction speeds and lowered fees, attracting more liquidity into its DeFi ecosystem and boosting TVL by nearly 40% to $1.5 billion.

How does derivatives open interest affect AVAX price momentum?

Rising open interest indicates increased trader confidence and speculative activity, which can amplify price rallies but also increase volatility risk if leveraged positions unwind.

Why is AVAX’s social dominance declining despite price gains?

While traders show optimism, broader retail interest and social media discussions have waned, limiting the rally’s reach and potential for wider adoption.

Key Takeaways

• DeFi TVL surged nearly 40% to $1.5 billion following Avalanche’s Octane upgrade, driven by faster transactions and lower fees.
• Derivatives open interest rose 15%, reflecting increased trader confidence and speculative activity.
• Social dominance declined to 0.419%, while weighted sentiment improved slightly, indicating cautious optimism amid fading hype.
• Network activity dropped sharply, with new addresses down 33.93% and active addresses falling over 10%, highlighting challenges in sustained user growth.
• AVAX price tests key resistance at $26–$28; a breakout could confirm a bullish trend, while rejection may lead to a pullback.

Conclusion

Avalanche’s AVAX shows promising growth in DeFi TVL and trader interest post-Octane upgrade, supported by bullish technical patterns. However, mixed social sentiment and declining network activity pose challenges to sustained momentum. A decisive resistance breakout paired with renewed user engagement will be critical for validating this rally and unlocking further upside potential.