Cryptocurrency, Terra Luna, has crashed more than 65% in over 24 hours, according to trading data indicating that its price has now fallen below $16 per coin.
The unprecedented crash is wiping out the fortunes of many cryptocurrency investors.
Takeaway Points
- LUNA is now trading at $16, down more than 65% in the past 24 hours, and 80% over the week.
- Binance reports network slowdown, congestion, and suspension of withdrawals for LUNA.
- The collapse of the stablecoin has attracted speculative attacks and panic selling to Luna owners who have lost faith in the developers.
Cryptocurrency exchanges like Binance have paused Terra (LUNA) withdrawals due to consideration of the network’s volume of congestion.
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Terra co-founder Do Kwon tweeted on Tuesday that he is “close to announcing a recovery plan for the UST”.
He followed this up under a thread asking for community patience and assuring investors that the Luna Foundation Guard (LFG) is not trying to get out of its Bitcoin position by moving $1.4 billion in BTC and UST, instead putting the capital into the hands of a professional market maker to strengthen the algorithmic stablecoin peg.
Trouble in Paradise
So far, TerraUSD maintains its peg through an algorithm that adjusts supply and demand in a complex process that involves the use of its own balancing symbol, Luna.
Thus, the downfall of Terra for the first time in months, sparked what could be one of the most impressive sell-offs among the big cap tokens this year. This rapid decline has pushed LUNA out of the top 10 coins by market capitalization, now putting its market below $12.5 billion.
Many users have expressed their distress and pain at the tragic ordeal, leading to many unfortunate investment losses.
From now on, there is growing uncertainty from the public as to how the market will regain confidence in its treasury and other stablecoins amid this dramatic fall.
Several hours later, Binance has re-enabled withdrawals of UST and LUNA, and promised to continue monitoring the situation at hand.
