The last few days have been marked in crypto by the vertiginous fall in the price of the crypto Terra (LUNA). Thus, in the space of two days, the price of the Luna crypto lost more than 90% of its value. Unfortunately, this had consequences for the entire crypto market, especially the Avalanche crypto .
Avalanche crypto price plummeting
The price dynamics of the Avalanche crypto are very clearly in the red:
- – 60% over the last 30 days;
- – 57% over the last 60 days;
- – 64% over the last 90 days.
Admittedly, all cryptos (or almost) have been in the red for weeks. But if we look closely at the global top 20, Avalanche is the cryptocurrency that plummeted the most, neck and neck with Polygon (MATIC).
Currently, the price of the Avalanche cryptocurrency is €33. A week ago, its price was still flirting with €55. The capitalization of the Avalanche network is 7.8 billion euros, which ranks Avalanche as the 13ᵉ global crypto .
Why the crypto Avalanche (AVAX) fell?
In the decline of the crypto Avalanche (AVAX) there is a cyclical part. Indeed, most cryptos have been in the red for weeks, blame inflation, war, COVID, etc. But the fate of the Luna crypto also impacts that of the Avalanche crypto.
In theory, Avalanche and Luna cryptos have nothing in common. However, it should be noted that the Luna network used the Avalanche crypto as a “collateral asset” . Concretely, this means that the crypto Avalanche participated in stabilizing the price of stablecoins belonging to the Luna ecosystem. In detail, the Luna network owned 1.97 million AVAX coins, which represents an amount of $74.75 million.
Following the problems encountered by the crypto Luna, the foundation decided to sell its AVAX , which caused its price to drop. The foundation has done the same with bitcoin. When we know that it is one of the largest Bitcoin wallets in the world, we understand that its action has had a big impact on crypto prices.
What is Avalanche Crypto?
The Avalanche blockchain hosts decentralized applications (or Dapps) that work with smart contracts . In this, Avalanche is therefore in the same category as the following cryptos: Ethereum (ETH), Cardano (ADA), Solana (SOL), etc. Ethereum being the undisputed leading crypto in the field, these other cryptos are called “Ethereum killers” .
The origin of the Avalanche crypto dates back to September 21, 2020. The network uses Proof-Of-Stake (POS) as its consensus algorithm. This algorithm is less energy-intensive than the one used on Bitcoin for example (POS).
Moreover, the Avalanche crypto defines itself as an “incredibly fast, low-cost and environmentally friendly crypto”. It claims to be the “fastest” smart contract platform on the market today with a very large number of validators.