On Monday, the price of Terra (LUNA) turned bearish. The ecosystem that is known for its stablecoins has experienced its worst drop in months. And many people are concerned that it isn’t even close to being finished. Here are the most recent updates:
In only a few days, Terra (LUNA) has suffered a steep decline of over 170%. It’s one of the most severe crashes in the stablecoin platform’s history. The precipitous falls were caused by the main UST stablecoin losing its value against the dollar.
UST is now trading at around $0.65, down from its peak of $1.30. The UST stablecoin is pegged to the US dollar and is meant to be a stable store of value. However, the recent drop in value has called into question the stability of UST.
The value of LUNAs is set in USD, with the currency valued at $1 per LUNA. The stablecoin was trading at around 70% below the US dollar at one point.
This has spooked a lot of LUNA investors, causing the sell-off to begin. We had seen UST rebound somewhat but those gains have now evaporated.
The UST stablecoin is not the only one to lose value against the dollar. The Terra (LUNA) coin has also seen a sharp drop in value, falling by around 90%. This is a direct consequence of the UST drop as Terra (LUNA) is pegged to UST.
Investors are now turning to altcoins as a haven from the UST instability.
Bitcoin and Ethereum have both seen an influx of investment as a result. It remains to be seen how long this trend will continue. But it seems that, for now, UST is no longer the safe haven it once was.
There will be a lot of selling pressure on LUNA. Investors’ trust in UST has been severely eroded, and it will take time for the currency to recover. Expect further price drops over the coming weeks, as a result of investors’ severe loss of confidence in UST.
Despite the UST catastrophe, Terra is still one of the world’s most reputable stablecoin platforms. There’s no doubt that this incident will have an impact on LUNA’s price in the near term.
In the long term, however, Terra’s fundamentals are still strong. And the platform continues to be one of the most trusted stablecoin platforms in the world.
However, in the long run, we anticipate the platform to recover. When UST regains its 1:1 ratio against the dollar, investor confidence will undoubtedly rise.
The UST crash begins last weekend when the token suddenly lost 20% of its value. The sell-off accelerates on Sunday, with UST dropping to $0.85 before recovering to around $1.00.
However, the recovery was short-lived, and UST slid back down to $0.90 by Monday morning.
At the same time, Terra (LUNA), a stablecoin pegged to a basket of fiat currencies and cryptocurrencies, suffered heavy losses. LUNA plunges from $5.00 to $0.50 in just 24 hours, representing a 90% decline.
While UST has recovered somewhat since then, it remains well below its pre-crash price of $1.20. Terra (LUNA), on the other hand, has stabilized at around $0.60.
The UST incident is a timely reminder that even the most trusted and well-established stablecoin platforms can face challenges. It’s important to do your research before investing in any cryptocurrency.