Key Takeaways
DeFi TVL and Open Interest surged, but social and network metrics show mixed momentum. AVAX tests resistance after a double bottom as sentiment turns mildly positive amid falling address growth.
Avalanche’s [AVAX] DeFi ecosystem has seen a significant boost following its recent Octane upgrade, with total value locked (TVL) soaring nearly 40% quarter-over-quarter to $1.5 billion.
This growth highlights the market’s response to improved transaction speeds, reduced fees, and a streamlined user experience.
As capital continues flowing into the ecosystem, questions arise about whether the current momentum will lead to a sustained rally or a temporary spike in interest.
Are derivatives traders signaling a bullish continuation?
Open Interest has surged over 15% in the past week, now standing at $835.44 million. This increase reflects greater capital allocation into AVAX derivatives, often indicative of rising speculative interest.
While the uptick may strengthen the ongoing rally, it also introduces volatility risks, especially if leveraged positions unwind.
Still, the consistent growth in Open Interest suggests confidence among traders and could amplify upside momentum if backed by spot demand.
However, if sentiment shifts quickly, this leverage could turn into a headwind.
Will AVAX break past resistance?
AVAX recently completed a textbook double bottom pattern and broke out of its descending trendline. The price now hovers around the $26–$28 resistance zone, historically acting as a strong barrier.
This technical setup typically signals a trend reversal, but confirmation requires a decisive close above resistance.
A rejection from this level could trigger a pullback to retest lower supports.
However, sustained buying pressure—particularly from DeFi inflows and traders—could pave the way for a clean breakout in the coming sessions.
Source: TradingView
Why is sentiment improving while social attention weakens?
Despite the price rally, AVAX’s social dominance has dropped to 0.419%, reflecting fading discussions and hype around the asset.
In contrast, Weighted Sentiment improved slightly to +0.115, signaling a modest shift toward optimism. This divergence suggests that while traders are gaining confidence, broader retail interest has yet to catch up.
The muted social presence may limit the reach of this rally, especially if media traction doesn’t follow price performance. Therefore, a surge in social buzz could be key to fueling further upside.
Can AVAX maintain momentum despite falling network activity?
Network data paints a less optimistic picture, with new addresses dropping by 33.93% and active addresses falling over 10% in the last seven days.
These figures contrast sharply with the rise in price and TVL, implying that the rally may be driven more by capital rotation than organic user growth.
For long-term sustainability, Avalanche needs renewed user onboarding and interaction. Otherwise, the current momentum may lose strength once the initial upgrade-driven excitement fades from the ecosystem.
Conclusively, AVAX is showing technical and fundamental strength, with rising TVL, bullish price patterns, and growing trader confidence.
However, weak network activity and flat social traction could limit its upside. A successful resistance breakout, paired with renewed user growth, may validate the rally and open doors to higher targets.
