On the 11th of May, a Reddit user named Harucifer used the social media platform to share his analysis of the AVAX token. Harucifer shared some statistics that revealed that the Avax ecosystem might suffer a price crash soon.
The data revealed that the Luna foundation had stacks of AVAX tokens in its reserves. Due to the instability in UST in the past week, the Terra protocol will likely empty its AVAX reserves as its last option to save the dying token.
The Luna Foundation currently has $77 million worth of AVAX in its reserves and $25 million worth of LUNA. The cumulative worth of the reserve at the moment is $102 million, after selling almost $100 million worth of its assets yesterday.
LUNA Down, AVAX Next?
Following the LUNA-UST saga, the Luna foundation had no choice but to empty its Bitcoin reserves a few days ago. Despite sacrificing over $1 billion worth of assets cumulatively to rescue LUNA and UST, the price of both tokens has drastically fallen, with Luna trading at $0.6 at the moment and Terra UST trading at $0.63.
If Terra’s protocol is to keep up its goal to save UST, Avax will likely feel the effect. In the past seven days, the crypto market has felt the impact of Bitcoin’s crash. Avax has lost 55% of its worth in one week, and many other blue chips also lost significant value. Although, no asset has tumbled as much as LUNA this month.
LUNA had a weekly high of $82, but the tables unexpectedly turned for the decentralized crypto-asset, which lost 99% of its value in record time. Luna was also among the top ten cryptocurrencies by market cap earlier this week. Sad to say, Luna now sits on rank 277 and may still fall further if UST does not regain its peg.
Given the bearish nature of the crypto market, investors will be looking to open short positions for AVAX and other crypto assets that look likely to lose more value soon.
