Avalanche (AVAX) price rose 10% this week to hit $10 as influencers race to join the newly launched SocialFi platform Stars Arena. Can the recent spike in network activity drive AVAX price into a prolonged bull rally?
On September 27, Stars Arena, a Friend.Tech rival SocialFi platform launched on the Avalanche blockchain. Key on-chain indicators reveal that this has triggered a noticeable uptick in AVAX network traction.
Stars Arena TVL Has Hit $1 Million Within First Week
Stars Arena, Avalanche’s answer to Friend.Tech, has been well-received by the global SocialFi community. On-chain data compiled by DeFiLlama shows some staggering growth in the week-old platform’s capital inflows.
The chart below illustrates how Stars Arenas’ Total Value Locked (TVL) grew from $33,000 to $1.17 million between September 27 and October 2. This implies that capital flowing into the Avalanche’s own monetized SocialFi platform has grown by 3,400% within its first-week post-launch.
Stars Arena has now overtaken the likes of Post.Tech to become the second-largest SocialFi by TVL.
Total Value Locked is the dollar value of all assets or cryptocurrency tokens currently deposited on a DeFi protocol. Typically, when the TVL on a specific protocol rises exponentially, it means existing users are increasing their investment, and new participants are entering the ecosystem.
In evidence, various social media influencers, including Onlyfans star Vannessa Sierra, have recently taken to Twitter (X) to announce their Stars Arena membership and earnings.
Notably, most services and products hosted within a protocol are often denominated in the blockchain’s native token. Hence, as Stars Arena’s global adoption skyrockets, market demand for the AVAX token will likely increase in the coming weeks.
AVAX-Denominated Transactions Have Increased By 113% This Week
The Avalanche network has recorded a significant spike in transactional activity this week. This further confirms the positive outlook that Stars Arena TVL growth could boost AVAX market demand.
Indicatively, AVAX-denominated transactions have been rising since September 27, hitting 376,000 transactions on October 3. In fact, the last time Avalanche network activity hit this level was around July 26.
The Transaction Count metric provides a snapshot of the current economic activity on a blockchain network. Typically, network activity spikes suggest the underlying token is in demand and being increasingly utilized in economically viable transactions.
Unsurprisingly, the AVAX token price has witnessed a 10% bounce between September 27 and October 4.
In summary, this close correlation between the Stars Arena launch and the growth in the AVAX network confirms the prediction that social media influencers adopting the SocialFi protocol could inadvertently drive up Avalanche price in October.
AVAX Price Prediction: Bulls Could Target $20
The abovementioned on-chain indicators establish a close correlation between AVAX price and the growing SocialFi adoption on the Avalanche network. Hence, AVAX bulls could capitalize on that to drive the ongoing price rally toward $20.
The Global In/Out of Money Around Price (GIOM) data, which depicts the entry price distribution of current Avalance investors, also adds credence to this thesis.
It shows that if Avalanche bulls can surmount the initial sell-wall at $15, the AVAX price rally could realistically hit $20.
As illustrated below, the 755,280 addresses bought 17.2 million AVAX at an average price of $14.77. If they close their positions once AVAX prices edge toward $15, it could inadvertently cause a pullback.
But if the drop in Stars Arena’s global adoption intensifies as predicted, the Avalanche price could rally toward the $20 range.
Still, the bears could negate this bullish prediction if AVAX price reverses below $7. However, the chart depicts that 134,000 addresses purchased 10 million AVAX at the minimum price of $9.
As the largest cluster of investors who entered below the current prices, they could mount a significant support buy-wall.
But if that vital support buy-wall caves, it could result in a prolonged Avalanche price reversal toward $7.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.