AVAX recovered quite well in the first 20 days of November, during which time the price rose 134% from $ 62 to $ 147. After that, however, it gradually went down.
Regardless of the general deterioration in the market or the current correction by AVAX, the price is expected to start again soon and set records in the charts.
AVAX 4-hour chart | Source: Tradingview
Exciting activities in the chain
Avalanche’s ecosystem is slightly different from that of other networks. AVAX tokens exist on the X-Chain and can be traded there. On C-Chain, AVAX is used in smart contracts or to pay gas fees.
It is important to note that Avalanche will burn any AVAX received as transaction fees, as per tweets officially. In November alone, the network burned 162,445.16 AVAX on both C-Chain and X-Chain. As a result, the total number of tokens burned stands at 479,840, which is worth more than $ 50 million at press time.
The source: avascan.info
The burning mechanism permanently removes tokens from the circulating supply and effectively dumps the underlying asset. In addition, it directly affects the dynamics of supply and demand. As a result, AVAX will become scarcer over time and the price has the potential to rise sharply.
It should be noted here that once Ethereum began to burn its tokens, it was not immediately drained. ETH needs more time and the price is just starting to respond positively. This also happened with the LUNA of the Terra Protocol. So it will be some time before AVAX begins to respond consistently to the entire combustion mechanism.
On the other hand, the on-chain performance has been pretty good so far. For example, the number of daily transactions on Avalanche’s C-chain is increasing. This means that more and more people are using the network to make transactions.
The relatively low average gas price is one of the main reasons for the increased number of transactions and the attractiveness of the network.
The source: stats.avax.network
Interestingly, the cumulative number of contracts deployed on Avalanche’s C-Chain is also increasing. This is essentially another sign of healthy internet use.
In addition, when comparing the months of this year, the number of daily active addresses rose the most in the last month. Almost 652,000 addresses interacted with the network’s C-chain in November.
The source: stats.avax.network
The strong state of the above indicators should trigger an AVAX rally in the coming days. Thanks to the burning mechanism of the protocol, the medium-term outlook looks quite optimistic at this point in time.
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