Avalanche (AVAX) has emerged as one of many worst-performing cryptocurrencies among the many top-ranking tokens within the final 24 hours, partially because of fears linked to Terra (LUNA) and it is a near-dead UST algorithmic stablecoin undertaking.
Avalanche value dips amid Terra’s tax evasion FUD
AVAX’s value plunged by almost 14% between May 18, the place it traded close to $35 to May 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 Rebellion (@MarketRebels) May 18, 2022
The information got here three days after Luna Foundation Guard (LFG), a nonprofit subsidiary of TerraVarieties, revealed that it had round 1.97 million AVAX tokens (value $58.39 million at May 19’s value) within the reserves that have been speculated 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 very good portion of its holdings to shore up UST’s worth following its “depeg” from the U.S. greenback.
Interestingly, 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 May 11.
Technical evaluation tasks additional draw back for AVAX
From a technical perspective, AVAX’s value might fall by one other 40% in May because it breaks out of its prevailing bearish continuation setup.
Dubbed “bear pennant,” the sample seems when the value consolidates inside a variety—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 May, down about 40% from May 19’s value.
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