Terra, a stablecoin, has dropped more than 60% to $10 in the last 24 hours and has dropped more than 85% in the last seven days due to the crypto bear market. Terra’s price has dropped by more than 90 percent since reaching a high of $119.8 in April of this year.
The cryptocurrency gained traction earlier this year when the non-profit Luna Foundation Guard, a subsidiary of Terraform Labs, the business behind TerraUSD, committed to gathering $10 billion in bitcoin to support the currency’s dollar peg.
Terra stablecoin in a fix
“Terra (LUNA) has had a whirlwind of a week, with the token plunging at an alarming rate from a steady price of $88 to a low of $1. Terra’s algorithmic-based stablecoin TerraUSD (UST), which is pegged to the dollar, began the catastrophe when it plunged quickly to almost $0.6. UST and LUNA: Binance, one of the most popular cryptocurrency exchanges in the world, has temporarily halted the withdrawal of UST and LUNA. All of this had a cascading impact on LUNA pricing, which spiraled out of control. The rising channel pattern on the daily chart of LUNA has been broken. At $4, instant support might be expected, “WazirX COO Siddharth Menon stated.
Terra has gone off on a bad road.
According to the price site CoinGecko, it broke its 1:1 peg to the dollar on Tuesday and plummeted as low as 67 cents, before rebounding slightly to 91 cents by Tuesday afternoon. Unlike other stablecoins that have traditional assets as reserves, TerraUSD maintains its peg with a complicated algorithm that moderates supply and demand through the use of Luna, another balance token.
“Terra USD (UST) has been trading well below its dollar peg since Monday, but the initial drop to 98 cents was simply the start of a far greater plunge. As Do Kwon’s Terraform Labs and the Luna Foundation Guard seek to restore the dollar peg, the question on everyone’s mind is whether the project can be saved. Massive withdrawals from the Terra blockchain App Anchor have resulted from the extended devaluation, which has seen its balances drop by $7.8 billion, or 30% “recent,” claimed Melbin Thomas, Sahicoin’s Co-Founder.