Avalanche Remains Under Pressure Despite Circle’s CCTP Effort

Dalmas Ngetich

1 year ago

3 mins read

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The native currency of Avalanche, AVAX, remains under pressure despite Circle’s effort to launch a facility that will enable the direct transfer of USDC between Ethereum and Avalanche blockchains.

Avalanche (AVAX) Is Down 18% From April 2023 Peaks

Avalanche is a smart contracting platform with sub-second transaction finality and a rival of Ethereum. However, considering the first-mover advantage of Ethereum and the activity level on the pioneer smart contracting platform, Avalanche lags even though it offers high scalability translating to relatively low trading fees.

Despite the launch of the Cross-Chain Transfer Protocol (CCTP) by Circle, the team behind USDC, a stablecoin; AVAX remains under trading range and has been unable to move higher, reversing recent losses.

When writing on April 27, AVAX is down 18% from April 2023 highs of around $20 and down roughly 10% in the last trading week, according to CoinMarketCap data.

Although the market uptrend of April 26 temporarily forced AVAX higher, buyers on April 27 didn’t follow through. AVAX remains below the local resistance at $18 but above last week’s support at around $16.

Avalanche Price On April 27| Source: AVAXUSDT On Binance, TradingView

However, from a broader perspective, AVAX is up 25% from March 2023 lows and has gained 65% from December 2022 lows. The impressive performance was a huge boost for AVAX, a coin that plunged 88% from November 2021 peaks when it was changing hands at around $145.

Based on the current AVAX formation, it is yet to be seen whether fundamental events will trigger demand and push the coin above $20, reversing this week’s losses.

Circle Launches Cross-Chain Transfer Protocol For USDC Transfer

The decision by Circle to develop and launch a mainnet protocol for bidirectional cross-chain transfers between Ethereum and Avalanche will be convenient for users.

It could also boost decentralized finance (DeFi) activities in Avalanche since users don’t have to use a third party, effectively eradicating the need for bridges and helping consolidate the web3 ecosystem. This would also have a significant effect on general liquidity on the Avalanche blockchain.

Avalanche is suited for the development of decentralized finance (DeFi) dapps and as of April 27, the blockchain managed over $798 million as measured by the total value locked (TVL), according to DeFiLlama. Aave, a lending protocol available in, among other chains, Ethereum, is the largest DeFi dapp by TVL, managing $262 million.

Besides liquidity, considering the mega hacks of 2022, for example, the Ronin and BNB Chain Bridge hacks, the Cross-Chain Transfer Protocol (CCTP) also boosts security for users and DeFi protocols.

Circle said several firms, including MetaMask, Celer, and Wormhole, have pledged to use the CCTP.

Feature Image From Canva, Chart From TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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