Terra and LUNA have had a similar de-pegging event a year ago. However, this time the loss of credibility is much more significant.
The Terra deleveraging can be compared to the fall of BitConnect, one of the first schemes where the value of BTC supported the creation of new assets. BitConnect crashed with a peak market cap of $2.5B in notional value, while LUNA had accrued more than $28B in value locked and above $40B in market capitalization before crashing.
Despite the more liquid and developed market, Terra LUNA still pressured all other assets.
Avalanche (AVAX), which also holds some of the supply of UST, fell to $33.55, down more than 99% in a day. Solana (SOL) sank to the $55 range. NEAR Protocol is also down by more than 25%, as it is one of the partners of Terra, sinking to $7.33.
The fallout for crypto markets remains chaotic, exacerbated by leveraged positions. LUNA trading has basically stopped, as any attempt at leverage would end with liquidations.
The price at the low range is extremely unstable, dipping by as much as 50% and doubling, with a trend to go to zero or even see trading suspensions. LUNA was extremely volatile,crashing as low as $0.87, then regaining positions to $2.20 on limited trading. The asset fell below the top 30 of assets within hours and slid as low as $0.11. At the time of writing price low $0.12.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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