Although the development is said to be a positive trigger for Avalanche [AVAX]it has been dampened by bearish signals from the broader market, which has already wiped more than $137 billion from the crypto market.
Avalanche keeps losing
While Avalanche wasn’t the best-performing asset on the market, it still outperformed many cryptocurrencies through May, leaving the altcoin and investors unhappy.
In a month, AVAX has fallen from $70 to $18.5 at the time of writing, depreciating nearly 88% from its all-time high of $151.
And it will continue this series in the future. The asset is on the verge of reaching oversold territory, which will make it far more difficult for AVAX to recover. And to make matters worse, the downtrend active on the charts is gaining strength, resulting in more losses for Avalanche.
More than what you see…
The DeFi chain needs to avoid this at the moment as it is already losing trust from its community, and the same fear has now extended to validators as well.
Although Avalanche is a Proof-of-Stake (PoS) consensus system, Avalanche does not guarantee much computing power to validate transactions. The validators might leave the company as AVAX’s reward value might not be enough to commit their resources to it.
Both validators and delegators (those who vote to vote for a validator for a portion of the validation bounty) have left the network since early May.
The number of validators has decreased by 200 to 1,423 and the number of delegators has decreased by 2,080, down to 19,000.
This depreciation is consistent with the observed decline in monthly active users, which decreased by more than 20,000 between April and May.
But the difference could turn around this time, as the total number of active investors has reached 200,000 to date. With an average of 44,000 daily active users, Avalanche could surpass May’s 619,000 user count in just the next 10 days.
Regardless, the sustained growth network may need to use a different method to attract investors as AVAX’s performance has not been top-notch. Avalanche’s DeFi capabilities speak a lot for its potential, but they’re not that helpful right now either.