By now most of us are aware of the dreadful situation Terra (LUNA), and its stable coin UST, have found themselves in. Terra (LUNA) has fallen by 97% in 24 hours, and at press time was trading at a sorry $0.860855.
Luna Foundation Guard (LFG) is depleting its crypto assets to restore its stablecoin’s $1 peg. All the while, Avalanche (AVAX) is suffering the price for being one of the collateral assets used to keep TerraUSD (UST) pegged to the US currency.
On May 11th, AVAX’s stock plunged over 30% to $32.50, its lowest level since September 2021. Its enormous intraday decrease occurred at the same time that UST fell to as low as 23 cents, thereby destroying its stablecoin status among traders and investors.
According to data given by researcher CrypOrca, the corporation presently possesses 1.97 million AVAX valued at almost $74.75 million.
The LUNA markets also have a similar sentiment looming around its investors. LUNA’s value plunged by 85% on May 11th, its worst daily performance.
Avalanche Bulls tried to keep AVAX from sliding below a critical support level at $36. Their efforts helped the token return about 22% of its losses on May 11, with its price rising from $32.50 to over $39.50. However, as AVAX’s upward retracement meets one major obstacle after another, a full-fledged bullish turnaround looks doubtful.
This might cause the AVAX/USD pair to retest $36 as support for a breakdown move, putting the price in danger of falling below $20, a key price floor from February to April 2021.
Moreover, AVAX is facing headwinds from a rising interest rate environment, which has impacted the crypto market buying mood.
At press time, Avalanche (AVAX) was trading at $33.0220, down by 34% on the daily charts, and by 45% on the weekly charts. The project is currently ranked #13 on CoinGecko.