Most investors are aware of the bitcoin market’s recent volatility. However, it has proved disastrous for Terra, an algorithmic stablecoin. LUNA tokens support the UST token as the network’s reserve currency. Terra keeps its peg by minting and burning LUNA, its native token, as well as Bitcoin and other digital assets. To put it another way, UST’s stability is highly dependent on LUNA’s stability.
Terra investors were devastated as the native token LUNA plummeted to its lowest level in a year in less than 48 hours. On Wednesday, the token, which had already lost 55 percent on Tuesday, lost another 85 percent. In the last few days, it has wiped out practically all of the wealth of investors.
#Cryptocrash Update#cryptocurrency market cap crashes to new low; #Terra (#LUNA), #UST bleed#cryptotrading #Crypto #CryptoNews #Bitcoin #BitcoinCrashhttps://t.co/Qu8djc6w0U
— Financial Express (@FinancialXpress) May 11, 2022
After trading at around $66 on Monday, the toke hit an intraday low of $4.21 on Wednesday. The currency is now worth 97 percent of its previous peak of $118. For the third day in a row, TerraUSD (UST), its stablecoin, has lost its dollar peg. The price of LUNA, its brother token, has dropped as a result of UST’depegging.’
“It may be difficult for UST to maintain its peg during moments of excessive volatility or sudden market crashes,” WazirX Trade Desk said. “LUNA’s tokenomics are fundamentally solid in a perfect world where market forces act as they should.”
The Terra network wants to buy $10 billion in Bitcoin as a UST reserve in order to keep the stablecoin’s value stable, which is the only reason why Bitcoin is used to back UST.
As traders react to today’s crypto collapse, which has sent prices lower, traders are thinking about Terra (LUNA-USD) price expectations.
In recent days, concerns about the state of the market have weighed severely on cryptos. Among these are concerns about rising inflation, rising interest rates, a future recession, and other factors.
Despite the fact that the value of digital currencies is declining, CEO Brian Armstrong stated on Tuesday that the crypto exchange is “not in risk of going bankrupt.”
Coinpedia estimates that LUNA will trade between $131.93 and $256.65 by the year 2023. The cryptocurrency CryptoNewZ is next, with price predictions for 2023 ranging from $78 to $85 per coin.
Terra has been added to our list by Gov Capital, which has a one-year price prediction of $166.04. WalletInvestor finishes with a one-year price forecast of $150.946 for LUNA.
LUNA was down 46.9% during the previous 24-hour period as of Tuesday morning, but still up 102 percent over the previous year.
Crypto traders looking for more up-to-date information are in luck.
