- Terra (Luna) fell at 99.6% after reaching its all-time high of about $120 last month.
- The terra price has now dropped to 0.005.
- Crypto exchanges have started taking steps in response to the fall of Luna.
The trillion-dollar crypto market is struggling! Post the dramatic fall of Terra (Luna), a popular cryptocurrency, from more than $400 billion to about $500 million, on Thursday morning, making investors lose their life savings in just a fraction of seconds.
The crash of Terra (Luna), which was once ranked among the top 10 most valuable cryptocurrencies, has caused turbulence in the crypto industry, with several investors now living in fear of losing their lifetime savings in the aftermath of the tragic mayhem.
Terra (Luna) had reached its all-time high of about $120 last month. The current scenario is the first of its kind where the top crypto collapsed below $1.
No one imagined Luna will ever hover around 10 cents..
The past 24 hours has created avalanche in the crypto market as the LUNA price fell 96%, pushing it to less than 10 cents. That’s down from about $60 earlier this week and a record $120 in mid-April.
Terra USD de-pegging messacre
The massacre in the market caused LUNA prices to snap at a lightning speed. Though it didnt stopped here LUNA plummeted through various support levels as terraUSD (UST), a Terra-issued stablecoin that’s meant to be priced 1:1 to the U.S. dollar, lost its peg.
Fear of Intense selling-pressure
The sell pressure on Luna got intense over the weekend as millions of investors started liquidating their earnings on Anchor, basically a Terra protocol for earning yields on UST, to lower down the interest rates as per the analytics.
It all happened around the TerraUSD algorithmic stable coin de-pegging massacre. So now, 1 UST can be redeemed or minted for exactly $1 worth of LUNA at any time.
Theoretically it may help UST retain its value and can create demand for both tokens. Trading of Luna and UST is still on to maintain the peg and profit by buying and selling, incentivizing them to maintain UST’s peg.
What caused the selling pressure? Will it survive the heat?
The massive flow of supply has added selling pressure on LUNA tokens, as per the price drop trend. Even though the market is bleeding it still put UST on the path of recovery, to the 60 cents level in Europe in the morning hours on Thursday.
Interestingly, Terra also proposed several measures to save UST’s peg and to prevent futher liquidation of Luna on Thursday.
The entire week has baggage has demeningly pushed LUNA out of top ranking crypto coins and as of thursday it was ranked as 81st in the market. The tokens were valued at just under $4 billion last week, while on Thursday the capitalization snapped down to $720 million.
Inspite of the fall, many industry experts are on ground as it may upbeat on the longer-term outlook of algorithmic stablecoins.
According to Brian Gallagher, co-founder of Partisia Blockchain, “It is still the earliest days of algorithmic stable coins. There will be many failures along the way to hold the peg, as they’re mostly in the experimental phase. We have to accept the failures along the path.”