Avalanche (AVAX) price drops 45% in a month and data points to further downside

cointelegraph.com:

Avalanche (AVAX) is down 45% in 30 days and in the same time the cryptocurrencies' total market capitalization shrank by 29%.

Despite the recent downturn, this decentralized application (DApp) platform remains a top contender in the layer1 and layer2 race and it ranks high in terms of smart contract deposits and active addresses. Yet, the lackluster token price is still causing investors to rethink whether the network remains a “serious” competitor.

The brutal sell-off on risk assets caused AVAX to test the $14.80 support multiple times, while the current market capitalization stands at $4.8 billion. It’s important to also note that the network's total value locked (TVL) holds an impressive $3.2 billion.

As a comparison, Solana (SOL) offers incredibly low network fees and holds a $2.1 billion TVL. Yet, SOL token's market cap stands at $12.9 billion, which is almost 3 times larger than Avalanche's valuation at the $14.8 price level.

The TVL indicator is extremely relevant because it measures the deposits on the network's smart contracts. If we use Polygon (MATIC), an Ethereum layer-2 solution, as a proxy, the network holds a $1.8 billion TVL while the token's market capitalization stands at $3.5 billion.

In short, Avalanche looks heavily discounted considering how similar networks’ market capitalization vastly exceed their respective TVL.

Avalanche's primary decentralized application metric strengthened in the last 60 days as the network's TVL jumped to 184 million AVAX tokens. This suggests that even as AVAX price crashed, investors did not withdraw tokens from its decentralized applications.

In terms of AVAX tokens, the network's TVL has effectively grown by 35% in two months. As a comparison, Ethereum’s TVL increased by 10%