Bitcoin (BTC), which was under constant sell pressure, fell from its long-term trading range in May 12.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Tether moves as UST remains below $0.60
Data from TradingView and Cointelegraph Markets Pro followed BTC/USD when it left the range it had traded since 2021.
The pair was at $26,700 on Bitstamp at the time of writing. This is its lowest level since Dec 28, 2020.
As fallout from Terra’s stablecoin meltdown continued to ricochet around crypto, and beyond, rumors claimed that professional funds were facing solvency problems due to losses on LUNA/UST.
“People are still processing it but this is the Lehman Moment for crypto” Hear about many funds potentially insolvent due to Luna meltdown
— Frank Chaparro (@fintechfrank) May 12, 2022
Tether’s internal token, LUNA (or LUNA), had almost lost its value by the time this article was written. It traded at $0.22 at the time. LUNA/USD was trading at $80 at the beginning of May.
LUNA/USD 1-day candle charts (Binance). Source: TradingView
Terra executives are currently focusing on restoring the U.S. dollar peg. UST was around $0.60 at the time. This is still far below $1, but more than twice the week’s record lows.
1 hour candle chart for USD/UST (Coinbase). Source: TradingView
Despite this, the strain was becoming more visible in crypto as Tether, the largest stablecoin (USDT), began to show worrying signs that it was following UST’s lead.
At the time this article was written, USDT/USD was below $0.99 on major exchanges.
Paolo Ardoino, chief technology officer at Tether, commented on the stability of the system. He said that USDT withdrawals were going as normal.
Part of a tweet said, “>300M redeemed within the last 24h without any sweat drop,”
Candle chart USDT/USD 1 hour (Bitstamp). Source: TradingView
CryptoQuant, an on-chain analytics firm, added that records were set for stablecoin outflows on major exchanges.
Chart of stablecoin exchange outflows Source: CryptoQuant
In 24 hours, $1.22 Billion liquidated
Analysts were open to the possibility of the current levels being lost, despite the fact that the macro range low was created in January 2021.
Related: Ethereum whales are busy as transactions reach highest point since January
“Whatever you lose during a macro downtrend you will gain back in a micro uptrend.” Rekt Capital, a popular trader, stated that you only need to pay attention to markets when they are extremely bearish.
An earlier tweet, May 11, highlighted the macro range.
If #BTC loses this green area as support… That will be the confirmation that $BTC will enter a multi-month downtrend#Crypto #Bitcoin pic.twitter.com/ReIa6D4yw3
— Rekt Capital (@rektcapital) May 11, 2022
Market liquidations reflected the extent of losses. Coinglass, an on-chain monitoring tool, showed that the total value of Bitcoin and altcoins surpassed $1.2 billion within 24 hours.
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