Crypto Analysis: Avalanche (AVAX) Price Surge and Prospects Amid Stars Arena SocialFi Launch

Crypto Analysis: Avalanche (AVAX) Price Surge and Prospects Amid Stars Arena SocialFi Launch

Crypto News – Avalanche (AVAX) experienced a notable 10% price surge this week, reaching $10, fueled by influencers rushing to join the newly launched SocialFi platform, Stars Arena. This surge is prompting speculation about the potential for a prolonged bull rally.

On September 27, Stars Arena, a SocialFi platform rivaling Friend.Tech, made its debut on the Avalanche blockchain. Key on-chain metrics indicate a significant increase in AVAX network activity following this launch.

Stars Arena TVL Hits $1 Million Within the First Week

Stars Arena, Avalanche’s response to Friend.Tech, has been warmly embraced by the global SocialFi community. On-chain data compiled by DeFiLlama showcases remarkable growth in capital inflows to this platform, which is merely a week old.

The chart below vividly illustrates Stars Arena’s Total Value Locked (TVL) escalating from $33,000 to an impressive $1.17 million between September 27 and October 2. This meteoric rise implies a remarkable 3,400% increase in capital flowing into Avalanche’s monetized SocialFi platform within its inaugural week.

Stars Arena has now surpassed competitors like Post.Tech to become the second-largest SocialFi platform in terms of TVL.

Total Value Locked (TVL) is a metric representing the dollar value of all assets or cryptocurrency tokens presently held in a DeFi protocol. A substantial increase in TVL typically signifies heightened investment from existing users and the entry of new participants into the ecosystem.

In a clear indication of growing adoption, various social media influencers, including Onlyfans star Vannessa Sierra, have recently taken to Twitter to announce their membership and earnings from Stars Arena.

Notably, most services and products hosted within a protocol are often denominated in the native blockchain’s token. Therefore, as Stars Arena’s global adoption skyrockets, market demand for the AVAX token is likely to rise in the upcoming weeks.

AVAX-Denominated Transactions Witness a 113% Weekly Increase

The Avalanche network has observed a notable surge in transactional activity this week, further affirming the positive outlook that the growth in Stars Arena TVL could bolster AVAX market demand.

Specifically, AVAX-denominated transactions have been on the rise since September 27, reaching 376,000 transactions by October 3. This level of network activity was last seen around July 26.

The Transaction Count metric offers a snapshot of the ongoing economic activity on a blockchain network. Typically, spikes in network activity indicate increased demand for the underlying token and its growing utilization in economically viable transactions.

Unsurprisingly, the AVAX token price has witnessed a 10% increase between September 27 and October 4.

In summary, the strong correlation between the launch of Stars Arena and the growth in the AVAX network validates the prediction that the adoption of the SocialFi protocol by social media influencers could inadvertently drive up the price of Avalanche in October.

AVAX Price Prediction: Bulls Aiming for $20

The aforementioned on-chain indicators establish a strong correlation between AVAX price and the burgeoning adoption of SocialFi on the Avalanche network. Consequently, AVAX bulls may seize this opportunity to drive the ongoing price rally towards $20.

The Global In/Out of Money Around Price (GIOM) data, illustrating the entry price distribution of current Avalanche investors, further supports this notion.

It indicates that if Avalanche bulls can overcome the initial sell-wall at $15, the AVAX price rally could realistically reach $20.

As depicted below, 755,280 addresses acquired 17.2 million AVAX at an average price of $14.77. If they decide to exit their positions as AVAX prices approach $15, it could inadvertently cause a pullback.

However, if the anticipated drop in global adoption of Stars Arena intensifies, the Avalanche price could rally towards the $20 range.

Nevertheless, bearish sentiment could undermine this bullish prediction if AVAX price reverses below $7. The chart demonstrates that 134,000 addresses purchased 10 million AVAX at a minimum price of $9.

Being the largest cluster of investors who entered below current prices, they could provide significant support in the form of a buy-wall.

However, if this crucial support buy-wall weakens, it could result in a prolonged Avalanche price reversal towards $7.