Stock Groups

Cryptocurrency luna crashes to $0 as UST falls from peg; bitcoin rises


BitcoinOn Friday, the market rebounded and climbed above $30,000 in spite of the continuing woes with TerraUSD stablecoin. This has created panic in the crypto world.

Around $30,262.85 was the price of bitcoin at 4:00 AM. ET Friday: The cryptocurrency bitcoin was trading at around $30,262.85 ET, CoinGecko data shows. This is a 8% increase in 24 hours since it fell to levels last seen in late 2020.

However, digital currencies are still at 16% below their previous seven-day average.

Recent crypto meltdown has been a major event. billions of dollars wiped off the marketThe crash of the controversial stablecoin called as TerraUSDUST (or USD), which should be pegged with the U.S. Dollar one-to-1.

According to CoinGecko data, UST lost its peg on Friday and was trading around 14 cents.

LunaUST token UST is associated with, presently, UST’s token UST is worth $0

UST is linked to luna. UST has been described as an algorithmic stablecoin, meaning that its $1 peg will be governed in part by underlying code. This is fundamentally different from other stablecoins such as tether USDCThese bonds are secured by tangible assets like real estate. UST does not have any real-world reserves

The UST algorithm is implemented through a complex system of minting and burning tokensPrice stability. The creation of a UST token involves the destruction of some related crypto luna in order to keep the dollar peg.

The extreme volatility in the market has made it difficult for UST to keep the peg.

The Terra blockchain that underpins UST, luna and other transactions has stopped processing transactions two times in 24 hours.

In addition to the UST saga crypto markets were also hit by a variety of headwinds, including higher interest rates inflation and interest rate hikesThese factors have led to a sell-off in global stock marketsThis has now filtered through. It has been shown that cryptocurrency prices are closely related to stocks markets.

“The Luna/UST market situation has severely damaged market confidence. The majority of cryptocurrencies are currently down [more than] 50%. This, combined with fears of global inflation, is not good news for crypto,” Vijay Ayyar (Vice President Corporate Development and International at cryptocurrency exchange Luno), said.

It is possible that even the bitcoin boom will not continue.

In such markets it is common to experience bounces of 10-30%. Ayyar explained that such bounces are typically bear market bounces. They test support levels and serve as resistance.