Avalanche (AVAX) loses 30%+ in April, but its DeFi footprint leaves room to be bullish

Avalanche (AVAX) price is down more than 30% in April, but despite the negative price move, the smart contract platform remains a top contender for decentralized applications due to its scalability, low cost transactions and its large footprint in the DeFi landscape.

AVAX token/USD at FTX. Source: TradingView

The network is compatible with the Ethereum Virtual Machine (EVM) and unique in that it does not face the same operational bottlenecks of high transaction fees and network congestion.

Avalanche was able to amass over $9 billion in total value locked (TVL) by offering a proof-of-stake (PoS) layer-1 scaling solution. This indicator is extremely relevant because it measures the deposits on the network’s smart contracts. For instance, Binance Smart Chain, running since Sept. 2020, holds $10.4 billion in TVL.

Positive news could create a price support

Even though the AVAX token price has suffered and even the TVL stands behind some of its competitors, investors remain bullish based on fundamentally positive developments occurred in the month of April.

According to an April 14 report by Bloomberg, Ava Labs, the lead developer of the Avalanche blockchain, raised $350 million from investors. This deal valued the company at $5.25 billion and according to data from DappRadar, Avalanche holds nearly 100 active applications ranging from decentralized finance to NFT marketplaces, and gaming.

Earlier in April, the organizations behind the Terra USD algorithmic stablecoin purchased a combined $200 million in AVAX for their strategic Terra USD reserves. Terra co-founder Do Kwon cited Avalanche’s solid ecosystem growth and large user base.

Even with the positive news, AVAX’s price remains 53% below its $147 all-time high, resulting in an $18.4 billion market capitalization. In comparison, the market cap of Terra (LUNA) stands at $31.0 billion, and Solana (SOL) has a $33.3 billion total value.