Avalanche has been facing a test day for the past 24 hours, with Ava Labs cryptocurrency facing massive volatility. The AVAX token initially went through a 16% dip before gaining momentum and rising 10%.
What does the future hold for AVAX?
If you expected volatility to be a thing of the past in crypto, you are probably too optimistic! The AVAX token plunged to $27.9 earlier today before rising to $31 and consolidating there at the time of writing. Currently the #13 on the list of the largest cryptocurrencies by market cap, AVAX continues to test trends in market volatility.
It is fair to say that the crypto market has just come back from a massive crypto crash caused by the TerraUSD de-pegging. AVAX also suffered during the crash, just like other crypto assets. At the end of the second week of May, Avalanche saw its market cap drop 60% to $7 billion.
But that is not everything. DeFi projects on Avalanche also took a hit after the crash. The Avalanche TVL in Defi is down more than 8.5% in the past 24 hours to $4.63 billion.
This is a decrease of more than 60% from the December 2021 of $13.7 billion. Another worrying indicator is the drastic drop in daily trades on Avalanche. It reached its all-time high on January 27, 2022 with 1.1 million transactions. But the pattern has only seen a downward trend since early May, when it dropped to 326,000 trades.
AVAX founder calls out Terra
In other news, Avalanche founder Emin Gün Sirer spoke in an interview with Forbes that the Terra crash could lead to stricter regulations. He even compared the crash to the infamous 2014 Mt Gox hack.
the mt. Gox hack was one of the biggest scams at the time as the crypto exchange went bankrupt after that. This hack was also a catalyst for a major drop in BTC prices, which have naturally recovered to great heights.
The Luna Foundation admitted $60 million to AVAX holdings that were not liquidated during the sale. Nevertheless, the Terra confirmed that no AVAX token was being sold, as reported by U.Today. This came across as a relief to users, despite the massive volume of the Avalanche blockchain, which would remain largely untouched even if the tokens were sold.
This post Avalanche: caught in a snow storm, AVAX bears the brunt of the crash
was published first on https://ambcrypto.com/avalanche-caught-in-a-snowstorm-avax-bears-the-brunt-of-the-crash/