Dr. Avalanche, Mr. Terra, and the tale of Luna Foundation Guard Reserve

Every week in the past, Terra [LUNA] was simply above $80 as traders bemoaned its religion. However at press time, the ex-top ten crypto was altering bloodstained arms at $0.00005687. Naturally, the shock of this fall has many new and confused traders their favourite altcoin initiatives, questioning if there’s an opportunity of them heading in the identical course.

When Avalanche [AVAX] misplaced over 30% of its worth in a day, this query got here up once more.

Going to tug a Terra?

At press time, AVAX was the #12 greatest crypto by market cap, and was altering arms at $34.26. This was after rising by 25.27% prior to now day and falling by 40.75% within the final week. So, might AVAX find yourself in the identical place as LUNA?

The metrics present that is unlikely, for a lot of causes.

At the start, it’s vital to do not forget that Avalanche doesn’t have a relationship with an algorithmic stablecoin that may be in comparison with TerraUSD [UST] and Terra [LUNA]. LUNA was meant to assist soak up UST fluctuations, however each currencies have since collapsed. Avalanche is just not even remotely in the same scenario.

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AVAX growth exercise had fallen at press time, however was nonetheless robust and holding its place between then 10-30 vary. Actually, growth exercise at press time was increased than it was when AVAX was buying and selling at round $70. This can be a signal of religion within the ecosystem.

If that wasn’t sufficient proof, be aware that the dev. exercise contributors rely was rising at the same time as AVAX’s value fell. On 10 Might, actually, this metric really hit an all-time excessive of 18, on the community.

Avalanche AVAX 12.46.10 13 May 2022

Supply: Santiment

Nonetheless, one factor that traders ought to hold an eye fixed out for is the $100 million in AVAX that Terra wished from the Avalanche Basis. At press time, the Luna Basis Guard reserve had about $76.40 million in whole. Out of this, 1.97 million AVAX – $67.81 million at press time – made up about 88.8% of the reserve.

There was no Bitcoin within the reserve at press time.

Screen Shot 2022 05 13 at 14.26.51

Supply: LFG Reserves

Don’t lookup [or down]

What do the worth indicators say about AVAX, nonetheless? The diverging Bollinger Bands warned of upcoming volatility, however a Relative Volatility Index [RVI] worth below 50 recommended that future volatility might take the asset’s value downwards.

Lastly, the Superior Oscillator [AO] was placing out rising purple bars at press time. This means that Avalanche may have rather more than a inexperienced candle on 13 Might to struggle off the bears.

AVAXUSD 2022 05 13 12 48 23

Supply: TradingView

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