AVAX all-time low
AVAX (Avalanche) has been portraying a decline since the price broke out from the support at $10.758 (bottom white line) on August 17, but special notice can be made of the steep downtrend since October 7. There is reason to believe that this decline is, amongst other technical factors, a result of Stars Arena encountering a major exploit on October 7 that led to the loss of funds locked in its smart contract.
Stars Arena is a version of FriendTech, an app that lets you buy tokens that give access to an individual’s chat room. The tokens are typically priced on a bonding curve, so they get increasingly more expensive as more people buy them. Fees are also quite high on these types of apps, with FriendTech charging 10% in fees on every transaction, split between the app and the group’s owner.
Security analysts at PeckShield estimated the size of the exploit to be around 266,104 AVAX coins, worth $2.9 million at that time. As a result, the value locked within the app fell to zero.
Stars Arena said it eventually struck an agreement with the hacker. As per the agreement, the hacker would return about 90% of the stolen funds in return for a 10% bounty. From the 266,104 AVAX that were taken, the hacker has returned 239,493 AVAX across two distinct transactions. For this act, the hacker received a bounty of 27,610 AVAX (currently worth $250,000), according to the team.
Avalanche Fails to Clear Horizontal Resistance
The decrease in price has consequently validated the long-term $10.758 horizontal area as resistance.
This shows that the AVAX price could not sustain its increase last week. While it initially reached a high of $11.823, it failed to close above the $10.758 horizontal resistance area. Rather, it created a long upper wick (red arrow) and fell below it
Despite the quick solution proffered by Stars Arena, there has not been a positive effect on the markets. This may suggest that there might be a further decline. However, if the price reclaims the $10.758 area, it can lead to a 133.3% increase towards the next resistance at $21.54.
Featured image: Shutterstock
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Dominic Jubemi is primarily into legal practice. However, he has taken interest in building and grooming fundamental skills in FX and Crypto trading, audio engineering and in the nearest future, fiction writing.
