The depreciation of the coins of the Terra cryptocurrency project - LUNA and UST, continues to negatively affect the digital asset market. So, over the past few days, amid panic discussions about the fall of the above coins, several more cryptocurrencies related to Terra's activities have fallen in price. The token of the Avalanche project, AVAX, suffered the most. In just three days, the asset fell by 15% in price, from $35 to $28.8.
The story originates from the first seconds of the fall of Terra and the attempts of project management to prevent the global collapse of the blockchain. As you know, Terra has quite a few other digital assets in stock, which the company has been constantly buying up to provide support for its own cryptocurrencies, in particular the “reference” UST token. According to reports, the bulk of Terra’s reserves consisted of BTC and BNB, however, it was recently revealed that the project also owns a considerable amount of AVAX coins.
When the blockchain ran into problems, the developers decided to sell some crypto reserves to somehow keep their coins afloat. Among the currencies that were put up for sale were both BTC and BNB. The actions taken did not help Terra much, however, this was enough to pull other cryptocurrencies caught in collaboration with the project “to the bottom”. Market experts immediately suggested that the next in line were AVAX tokens. Terra, by the way, has almost 2 million of them. Against the background of actively spreading rumors about the mass sale of AVAX, the South Korean media reported about Terra's tax evasion. This news played a key role in the short-term future of AVAX.
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On May 16, the AVAX digital asset was trading above $35 on most exchanges. After the appearance of various rumors on the Web and reports of Terra's problems with the "tax law" of South Korea, AVAX tokens gradually but steadily began to fall in price. As of yesterday, May 19, the cost of the Avalanche project cryptocurrency has reached $28.5.
According to the analysis, which was carried out by the analysts of the Cointelegraph edition, the decline in the cost of AVAX will continue to grow exponentially. Now, experts say, the AVAX cryptocurrency has entered the stage of the so-called “bear payout”, due to which the price of the token may even fall to $17 by the end of May.