Avalanche (AVAX) has emerged as one of many worst-performing cryptocurrencies among the many top-ranking tokens within the final 24 hours, partially due to fears related to Terra (LUNA) and its a near-dead UST algorithmic stablecoin venture.
Avalanche price dips amid Terra’s tax evasion FUD
AVAX’s price plunged by almost 14% between Could 18, the place it traded close to $35 to Could 19 when the price dipped to $28.50. The dip coincided with a South Korean information company report that claims Terraforms Labs, the developer of the Terra blockchain, owes 100 billion gained (roughly $78.5 million) to the regional tax company.
#Terra owes $78.5M in taxes to South Korea’s authorities
— Market Insurrection (@MarketRebels) May 18, 2022
The information got here three days after Luna Basis Guard (LFG), a nonprofit subsidiary of TerraForms, revealed that it had round 1.97 million AVAX tokens (price $58.39 million at in the present day’s price) within the reserves that have been supposed to again its benchmark UST stablecoin.
In the identical pool, LFG additionally holds Bitcoin (BTC), Binance Coin (BNB), and LUNA. The agency had earlier offered a great portion of its holdings to shore up UST’s worth following its ‘de-peg’ from the US greenback.
Apparently, LFG has not offered any AVAX, nonetheless, the panic across the Terra fiasco prompted the Avalanche token to plunge by almost 50% month-to-date, together with a 30% intraday decline on Could 11.
Associated: Tether to transfer over 1B USDT from Tron to Ethereum and Avalanche
Technical evaluation initiatives additional draw back for AVAX
From a technical perspective, AVAX’s price could fall by one other 40% in Could because it breaks out of its prevailing bearish continuation setup.
Dubbed ‘bear pennant,’ the sample seems when the price consolidates inside a spread—outlined by a falling higher trendline and a rising decrease trendline—after a robust transfer downward. It resolves after the price breaks beneath the decrease trendline and, as a rule of technical evaluation, falls by as a lot because the flagpole of the earlier downtrend.
The bear pennant setup places AVAX en route to round $17 in Could, down about 40% from in the present day’s price.
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