Why isn’t Avalanche’s 295% DeFi deposit surge enough for AVAX’s price? - AMBCrypto

Avalanche has been experiencing significant growth in decentralized finance (DeFi) adoption, with deposits on Aave v4 reaching $225 million since its launch in July. This marked Aave v4's first expansion beyond Ethereum, demonstrating the network's increasing utility.

Total deposits on Aave v4 have crossed $1.75 billion, an all-time high, with Avalanche-specific deposits growing by over 295% in just two weeks since the end of October. Concurrently, active loans on the platform surpassed $100 million, indicating strong liquidity and utility growth.

Institutional investment

Meanwhile, AVAX One, a treasury focused on Avalanche tokens, reported $49.90 million in Q3 net income, driven by $55.10 million in unrealized digital asset gains.

The treasury eliminated $14.90 million in convertible debt during Q3 and has since shifted focus to purchasing AVAX tokens and treasury shares. AVAX One now holds 14.17 million AVAX, with 99.7% staked at an annualized rate of 5.85%.

Price action

Despite these positive developments, AVAX price has been testing the $8 support level, maintaining a sideways range between $8 and $9. The token has rebounded from this level five times previously, though broader market weakness could lead to a breakdown toward $7.

The resurgence of the red MACD histogram suggests increasing selling momentum, which could push the price to test $7.82 if the $8 support level breaks. This disconnect between network activity and price performance remains puzzling to market observers.