In trading on Thursday, May 26, Avalanche quotes fell by double digits after they had already lost 18% for the week and 57% for May.

The most likely reason for this drop remains the ongoing uncertainty surrounding the Terra (LUNA) and TerraUSD (UST) projects. Avalanche is linked to these two projects, which are managed by Luna Foundation Guard (LFG), because LFG has purchased nearly 2 million AVAX coins worth $100 million to keep in reserve as ancillary assets, explains The Ascent.

Emin Gan Sirer, CEO of Avalanche, acknowledged that his company Ava Labs lost $60 million due to the LUNA/UST collapse.

However, he states that he supports the work being done by the Luna Foundation and believes that AVAX stock is likely to have a stabilizing effect.