AVAX rallies to 3-month peak on network, DeFi growth hype

Avalanche’s native token AVAX responded to the latest news of the network’s growth, rallying to a three-month peak above $35 as it repositioned itself for DeFi.  Trading volumes also rose to the highest level in three months, at $2.12B. AVAX also went through a short squeeze, liquidating short positions above $35. 

The latest rally also surprised Hyperliquid whales, who were betting on a price slide. A total of 17 whales hold small gains or unrealized losses, while only 11 whales are long on AVAX. For now, the token seems to have finished the short liquidations, and a downturn is possible to attack liquidity accrued for long positions at around $33.

AVAX open interest is also close to its peak, at $924M, with over 73% of traders picking a long position. The token is one of the relatively old assets from the 2021 bull market, which is still reinventing its network and DeFi capabilities. 

AVAX continued its expansion after the recent plans to launch a $1B treasury based on discounted tokens from the Avalanche Foundation. Additionally, the chain saw increased activity, with over 78K daily active addresses.

AVAX rallies on rapid USDC inflows

USDC on AVAX is the most rapidly expanding stablecoin version, based on Token Terminal data. For the past month, the chain expanded its supply by 65.9%, for a total of over $1.2B in USDC. 

In total, Avalanche carries over $2.4B in various stablecoins, with a total value locked of $2.26B. 

One of the chief drivers of expansion is the chain’s version of Aave, which grew its value locked by over 33% in the past month.  Recently, Aave C-Chain also entered the top 5 of networks with the biggest inflows, with a net $6.3M added in the past 24 hours. C-Chain was surpassed by BNB Smart Chain, just behind Ethereum and Solana. 

For the past three months, over $30M net flowed into Avalanche C-Chain, with most of the funds originating on Ethereum.

While AVAX sees outflows for other stablecoins, USDC is growing in dominance, with around 50% of the chain’s total stablecoin supply. 

Avalanche achieves the highest APY on Aave

Avalanche C-Chain is being chosen by users for its higher yield opportunities. The chain’s Aave protocol offers up to 5.22% APY on USDC, comparably higher than chains like Arbitrum. 

Aave protocol uses the same approach but still has different yields on various chains. Avalanche has achieved the highest yield, which is becoming the main attractor for USDC usage. 

On Avalanche, EURC tokens on Aave can earn up to 9% yield, while USDC earns 5.22%. EURC recently reached up to 17.9% in yield, showing a potential niche market with higher volatility. USDC deposits are relatively stable, based on the offered current APY.

The stablecoin arbitrage conditions may change, but for now, Avalanche is getting a boost from demand for passive yield. The yield anomalies are putting Avalanche on the radar, as its DeFi space recovered in 2025. 

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