Avalanche (AVAX) has emerged as one of many worst-performing cryptocurrencies among the many top-ranking tokens within the final 24 hours, partially attributable to fears linked to Terra (LUNA) and it is a near-dead UST algorithmic stablecoin mission.
Avalanche value dips amid Terra’s tax evasion FUD
AVAX’s value plunged by practically 14% between Could 18, the place it traded close to $35 to Could 19 when the value 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 Rebel (@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 (value $58.39 million at Could 19’s value) within the reserves that had been presupposed to again its benchmark UST stablecoin.
In the identical pool, LFG additionally holds Bitcoin (BTC), Binance Coin (BNB) and LUNA. The agency had earlier bought a great portion of its holdings to shore up UST’s worth following its “depeg” from the U.S. greenback.
Curiously, LFG has not bought any AVAX, nonetheless, the panic across the Terra fiasco prompted the Avalanche token to plunge by nearly 50% month-to-date, together with a 30% intraday decline on Could 11.
Technical evaluation tasks additional draw back for AVAX
From a technical perspective, AVAX’s value might 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 value consolidates inside a spread—outlined by a falling higher trendline and a rising decrease trendline—after a powerful transfer downward. It resolves after the value 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 path to round $17 in Could, down about 40% from Could 19’s value.
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