Avalanche (AVAX) witnessed a meteoric start to 2023, gaining 98% in 30 days, and traders are now curious about whether the rally will extend throughout February. AVAX’s year-to-date gains for 2023 have outpaced those of Bitcoin (BTC) and Ether (ETH).
Recent reasons for AVAX’s rally can be attributed to an . The partnership is meant to easily deploy nodes on the Avalanche blockchain with Amazon Web Services (AWS). Ava Labs, which supports the Avalanche ecosystem, hopes the partnership increases blockchain usage for enterprises and governments.
While AVAX price has benefited from the news, some analysts predict that the move could have been a bull trap.
Let’s dig into the fundamentals to see if on-chain network activity supports the recent AVAX rally.
AVAX fees from DeFi are up
After the AWS news, AVAX price was not the only metric seeing a quick rise. On Jan. 14, Avalanche network hit a year-to-date high of $31,218 AVAX fees received. The increase in fees compared to the previous 30 days is 59%, signaling that positive price appreciation helped boost the fees that the network received.
Active addresses and users are down
A sign of blockchain health is the number of active addresses, users and transactions. Despite reaching a year-to-date high on Jan. 18 of 1.84 million transactions, Avalanche’s transaction count is trending down.
A similar downtrend is witnessed when looking at active addresses in the Avalanche ecosystem. Active addresses denote transactions taking playing on unique wallets for a given day. After reaching a year-to-date peak of 54,978 active addresses on Jan. 31, only 34,624 active addresses were registered the following day.
AAVE dominates Avalanche DApps
The active users on Avalanche seem to have a preference for using Aave (AAVE) on the AVAX blockchain. Over 36% of all Avalanche transactions flow through the Aave protocol. Investors have staked over $353 million on Aave’s Avalanche version, far surpassing the second-most popular protocol by verified total locked value (TVL), the Trader Joe decentralized exchange (DEX).
Ethereum DEX activity leads the way with over $1.6 billion in daily volume, whereas Avalance only sees around $104 million.
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