The amount of funds flowing through the Avalanche bridge is down 70% in the last 24 hours, DeFiLlama data May 31 shows.
70% drop in activity on the avalanche bridge to Ethereum
Over the past day, the bridge has facilitated $2,634,828 in transactions and processed $22.4 million in transfers in the past week.
The bridge processed 278 transactions in the last day, totaling about $2.6 million. It shows a sharp decline in activity between Ethereum and Avalanche, among the largest smart contract platforms in the world.
The Avalanche Bridge connects the Avalanche C-Chain, one of the three interoperable blockchains that define the low-end platform, with Ethereum.
Since C-Chain supports Ethereum Virtual Machine (EVM), assets can be seamlessly transferred from Avalanche to Ethereum and vice versa.
EVM support along with the decentralization of the bridge means that users can move funds between the two blockchains securely.
Avalanche, unlike Ethereum, is explicitly designed for decentralized finance (DeFi) dApps. It has high processing speeds, relatively low fees, and is decentralized. However, it lags behind Ethereum in activity, judging by the total value locked (TVL).
According to DeFiLlama data, more than $26.5 billion of the roughly $48 billion of all DeFi TVL is managed by dapps on Ethereum.
More assets moved between Avalanche and Bitcoin
In particular, while there is a worrying contraction in the number of transactions and value between Avalanche and Ethereum, the Avalanche Core Bitcoin Bridge is booming.
On May 31 there was a significant increase in transfers and value, with a rebound of 2,726%. Within 24 hours, more than $6.5 million worth of assets were transferred across the bridge. This is about half of the average weekly transfers which sit at $13.81.
Bitcoin transferred to the Avalanche C-Chain from the Bitcoin network is tokenized and complies with the ERC-20 standard. In that case, it can be moved to Ethereum and used to participate in DeFi.
Scanning spin-off activities from Avalanche to Bitcoin and Ethereum, the disparity could suggest that more users are moving their assets to and from Bitcoin.
However, no direct fundamental event could explain why more users are plugging in Bitcoin tokens and reducing commitment to Ethereum.
In the last 24 hours, Bitcoin, Ethereum, and Avalanche prices have been under pressure, falling from recent highs. To illustrate, AVAX is down 6% from the May 28 highs, extending losses from mid-April. AVAX is down 35% in the past six weeks and is retesting the March 2023 lows.
AVAX may drop below a critical multi-week support level if sellers double down. In that case, it could drop to December 2022 lows at around $10.
Featured Image from Canva, Chart from TradingView
