Avalanche, earlier this year, expanded the blockchain ecosystem by collaborating with Amazon Web Services (AWS). As a matter of fact, the AVAX price now seems to have developed depending on the rally in the market, regardless of this cooperation. When this is the case, the question comes to many investors’ minds, “Is the collaboration with AWS just an exaggeration?” Here are all the known details.
Although Amazon’s integration with Avalanche is a significant development, it is possible that the excitement of the investors is more than it should be.
Blockchain’s developer team also made a deal with Alibaba Cloud in late 2022. Although the global market share of this service is around 6%, the agreement did not provide the expected efficiency. Majority of the customers did not choose to start their validator services.
AWS wants to make more profit by making a similar deal. The biggest reason for this is that a certain profit is obtained from those who run validator nodes. Therefore, the agreement in question is not so surprising. Amazon also started supporting Ethereum nodes in May 2021.
Avalanche Ecosystem Has Problems
On the other hand, it is not possible to say that the Avalanche blockchain usage data is very encouraging. After the crash in May 2021, “gas use” declined and could not recover. The total value locked in the DeFi ecosystem is around $885 million, a two-year low. He places this ecosystem in 6th place to compare.
Indeed, gaming subnets like DeFi Kingdoms and Swimmer Network have been successful in the ecosystem. As a matter of fact, these achievements did not affect the mainnet much because projects have independent tokenomics and security.
Avalanche developers need to use the network in the security part or in the early stages to benefit from these projects. A promising game project such as Shrapnel and Ascenders also draws attention. However, it is unclear whether this will be sufficient.
AVAX Price Forecast
Koinfinans.com As we have reported, the reason for Avalanche’s recent price increase is the liquidation hunt of short orders in the futures market. Coinglass data shows that the funding rate for AVAX perpetual swaps has remained negative since the FTX boom in November. High shorts allowed whale buyers to run seller stops.
Funding rates are back in neutral territory after last week’s price hike. This effectively drained the fuel that caused the current bull run.
Nansen found that smart money deposited $2.3 million worth of AVAX during this period. In addition, venture funds and market makers including Jump Capital, Wintermute Trading and Longling added $1.3 million to the net inflow. In the second week of January 2023, the total AVAX inflow to the exchanges was $8,025 million.
The AVAX price gained 40% in the second week of 2023, while the stock market flow data recorded significant inflows, possibly as investors went on sale and raised warning flags for buyers.
Technically, a break above the 50-day exponential moving average (EMA) at $13.40 keeps the possibility alive to tag the 100-day EMA at $20.70, and the August 2022 high at $31.45. However, time for buyers to show their hands is quickly running out.
The MACD indicator is showing early signs of reaching the top as the buying volumes are starting to drop.
In the AVAX/BTC pair, the move faced resistance from the 0.000834 BTC support and resistance level, including the 100-day EMA. If the buyers fail to break this level, a drop to 0.000642 BTC is possible with a chance of reaching 0.000465 BTC.
As a result, the broader altcoin market capitalization (excluding Bitcoin) has already hit its bullish targets at $563 million around its 100-day MA. If the positive momentum starts to cool in the niche market, the AVAX uptrend will likely reverse as well.
Overall, Avalanche’s usage statistics have not changed since the last quarter of 2022. There is little reason to attribute the recent price increase to fundamental growth. The project has the potential to grow in the future by leveraging the blockchain playground.