As Bitcoin continues to weather the storm, a frantic effort is made to save UST. Next, a target of $35,000 will be set.
As turmoil at Blockchain protocol Terra continued, Bitcoin ( BTC), fell below $30,000 on May 10, for the first time since ten months.
Bitcoin prices rise to $29,700
Data from Cointelegraph Markets Pro, TradingView revealed that BTC/USD plumbing lows were $29,731 at Bitstamp.
Overnight BTC price performance was the first to cross $30,000 since July 2021. This occurred amid declining stock markets as well as fresh troubles for Terra’s United States Dollar stablecoin, TerraUSD.
Cointelegraph continues to report that UST witnessed an attack involving mass selling this week. This culminated in Terra using its huge 750 million BTC reserves as a support for its USD peg.
According to CoinMarketCap data, initial liquidity measures to reduce the threat were insufficient. UST plummeted to $0.67.
During this time, BTC/UST on Binance, the major cryptocurrency exchange, began acting erratically. It reached highs of $42,000, while other Bitcoin dollar markets struggled for $30,000.
Social media quickly spread rumors of a complete meltdown at Terra. Do Kwon (the firm’s co-founder) remained calm following the announcement of the mass BTC liquidity injection.
Kwon shared a summary of the situation by Jose Macedo (founding partner at Delphi Ventures), who said that Terra’s contingency plans would eventually lead to greater decentralization for the largest USD stablecoin in the crypto industry.
“Haters will be critical of this for centralization and they are right, for the moment. He wrote that @LFG_Reserve made $UST stronger, but also temporarily centralised,” he .
Data from BitInfoCharts on-chain monitoring resource, meanwhile, confirmed moves, wallet balance of Terra nonprofit Luna Foundation Guard (LFG), changing from 70,000 BTC or $2.23 trillion to 0 BTC.
Despite its collapse, BTC/USD traded at close to $32,000 as of May 10, 2018.
Some even offered to “buy the dip,” including El Salvador. President Nayib Bukele confirmed that 500 BTC had been purchased at an average cost of $30,744.
“I don’t know how deep markets will correct, as an extra outlier of LUNA UST is playing its part of the fall,” Cointelegraph contributor Michael van de Poppe reacted over the weekend:
“All I know is that the UST peg was a temporary shock, and I assume we’ll trade about $35K for Bitcoin in the next 24-48hrs.”
UST was trading at 8% below its USD parity at the time this article was written. After losing over 50% in 24 hours, Terra ( and LUNA), was trading at $32.
