Stablecoin Terra fell more than 60% to $10 in the past 24 hours, with the token falling over 85% over the past seven days amid a crypto meltdown. The price of Terra is down more than 91% from the all-time high of $119.8 that occurred in April of this year.
cryptocurrency It was shot to prominence earlier this year when the non-profit Luna Foundation Guard, an affiliate of TerraForm Labs, the company behind TerraUSD, raised $10 billion worth of bitcoin to support its dollar peg. promised to collect.
“Terra (LUNA) has had a week of whirlwinds, with the token falling at an alarming rate, falling from a stable price of $88. The debacle began when Terra’s algorithmic-based stablecoin TerraUSD (UST), which trades in the dollar With this, Binance, one of the top global crypto exchanges, temporarily halted withdrawals of UST and LUNA. All this has a cascading effect on LUNA prices. Caused, got it out of control. Daily chart for LUNA has broken below ascending channel pattern. Immediate support can be expected at $4,” said Siddharth Menon, COO of WazirX.
On Tuesday, it broke its 1:1 peg to the dollar and fell to 67 cents, according to price site CoinGecko, and by Tuesday afternoon TerraUSD had rebounded slightly to 91 cents.
Unlike other stablecoins that have reserves in traditional assets, TeraUSD maintains its peg through an algorithm that controls supply and demand in a complex process involving the use of another balance token, Luna.
The cryptocurrency asset has lost nearly $800 billion in market cap over the past month, reflecting a decline in equities on fears of aggressive interest rate hikes around the world to offset decades of high inflation. Monetary policy tightened as cryptocurrencies tighten liquidity curbs to counter runaway inflation, turning investors away from speculative assets in global markets.