Avalanche, currently the 14th largest cryptocurrency, has experienced a notable rise for six consecutive days following a significant token unlock. The Avalanche (AVAX) token reached a high of $23.25 on August 21, marking its highest level since August 3 and representing a 32% increase from its lowest point in August.

On August 20, the network unlocked 9.5 million AVAX tokens, valued at over $202 million. The next unlock is scheduled for November 18 this year. Investors should be prepared for more unlocks over the next few years, as only 64% of the total AVAX tokens have been unlocked so far. By August 2029, over 255 million tokens will be unlocked.

Token unlocks generally have a negative impact on existing holders as they increase the number of available coins. Additionally, they affect staking rewards since some of these tokens flow into staking pools. Data from StakingRewards indicates that AVAX’s staking yield has been declining in recent weeks, reaching 7.93% on August 21, down from 7.97% on July 21.

Staking inflows increased following the token unlock on August 20, after falling for six consecutive days. This suggests that some investors exited their stakes before the token unlock. Furthermore, data from Santiment revealed that intraday volume surged to over 309 million, the highest level since August 7.

Despite this recent uptick, Avalanche has faced significant pressure this year. The token has dropped by over 64% from its peak in March. It formed a death cross and a head-and-shoulders pattern in June, which often signals potential further downside.

Avalanche has also been losing market share in the Decentralized Finance (DeFi) sector. According to DefiLlama, its total value locked (TVL) has decreased to $882 million, making it the ninth largest chain in the industry. It has been surpassed by newer chains like Base and Arbitrum, which have assets of $1.49 billion and $2.68 billion, respectively.

In the decentralized exchange (DEX) market, Avalanche’s weekly volume stood at $421 million, compared to Arbitrum’s $3.7 billion and Base’s $3.18 billion. One possible reason for this is that Avalanche’s meme coins, such as Coq Inu (COQ), Kimbo, and Gecko Inu, have not gained significant popularity. In contrast, Solana’s tokens like Dogwifhat (WIF) and Bonk (BONK) have captured more market share.

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