Crypto investors’ portfolios had been bleeding over the past few days. The RoI figures, however, became even more blood-soaked on Monday. With Bitcoin dipping below $30k for the first time since July last year, most altcoins ended up losing major chunks of their valuations.
UST bleeds, and so does LUNA
Evert heard of a stablecoin shedding value? During market fluctuations, minor deviations keep taking place, and that phenomenon is not abnormal. Even in the worst-case scenario, whenever the numbers are rounded up, they end up reflecting $1. More so, because stablecoins, in their very essence, are meant to remain stable and not get affected by the harsh volatility of the crypto market.
Terra’s UST has, however, defied that thumb rule of late. As highlighted in a recent article, the stablecoin had already lost its $1 peg and had dipped below $0.986. During the late hours of Monday, nonetheless, UST went on to create a new low of $0.6065. In effect, it was down by close to 40% from where it was before the de-pegging happened.
Source: TradingView
Terra’s native LUNA token, on the other hand, was the most affected alt amongst the top 100. After shedding more than 60% of its value in just the past 24-hours, it was priced at merely $24.8 at press time.
The dip might perhaps come to a halt at this point because LUNA is currently trading around a critical demand zone. Back in the September-October period, buyers found this level attractive and loaded up their bags by accumulating LUNA tokens here.
Source: TradingView
Having said that, it shouldn’t be forgotten that the broader market was gearing for a rally back then, but now, the sentiment is evidently bearish. So, if LUNA breaks below $22.9—the floor of the said zone—then the tanking would continue and we might perhaps see the alt pay a visit back to the single-digit valuation runway before posing a recovery.
Binance halts withdrawals on the Terra network
Owing to the chaos in Terra’s ecosystem, Binance—the largest CEX in terms of daily volume settled—temporarily suspended withdrawals for LUNA and UST on the Terra network. Their official statement read,
“Withdrawals for LUNA and UST tokens on the Terra (LUNA) network were temporarily suspended on 2022-05-10 at 02:20 AM (UTC) due to a high volume of pending withdrawal transactions. This is caused by network slowness and congestion.”
Binance would reopen withdrawals for these tokens once the volume of pending withdrawals reduces and the network stabilizes.