Bitcoin (BTC), which fell below $30,000 on May 10, was the first drop in 10 months, as chaos at Blockchain protocol Terra continued.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Bitcoin prices rise to $29,700
Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD plumbing lows were $29,731 for 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 (UST).
Cointelegraph continues to report that UST was the victim of a mass-selling attack this week. Terra used 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.
This has led to a huge surge in BTCUST (Not Bitcoin worth dollars but in the UST stablecoin). pic.twitter.com/Xn7qcy4VMZ
— May 10, 2022, Blockchain Backer (@BCBacker).
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 centralisation, and they are right, for the moment. He wrote that @LFG_Reserve made $UST stronger, but also temporarily centralised” on May 9.
BitInfoCharts data, which is an on-chain monitoring resource, confirmed the movements, with Terra nonprofit, Luna Foundation Guard (LFG)’s wallet balance going from $2.23 trillion to 70,000 BTC.
Luna Foundation Guard (LFG) Bitcoin wallet (screenshot). Source: BitInfoCharts
LFG suggested that not all of the BTC previously owned had been sold and promised to update the community.
Table for 35,000
Despite its collapse, BTC/USD traded at close to $32,000 as of May 10, 2018.
Related: As the Bitcoin price reaches new lows, pro traders take a more passive approach
Many were willing to “buy” the dip, including El Salvador. President Nayib Bukele confirmed that 500 BTC was 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,” Michael van de Poppe, a Cointelegraph contributor, said overnight.
“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.”
The “shock”, which UST traded at 8% under USD parity, was still not over at the time this article was written. Terra (LUNA), which had lost over 50% in 24 hours, was trading at $32.
LUNA/USD 1-day candle charts (Binance). Source: TradingView
Popular commentator Benjamin Cowen conducted a Twitter survey and found that over 12,000 people believed the peg would eventually be reinstated.
com. You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.