Terra Luna (LUNA) faced a tough week as prices fell almost 99% last week. The Luna lost its peg against the USD, and within days its prices plunged.
Terra’s Luna Prices Slump
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Luna prices slumped to $0.00 on Binance. Terra Luna is a stablecoin that lost almost all its value. The value of Luna is tied to the US Dollar, as it is a stable coin. Stable coins do not face much volatility, but Luna has been an exception. It lost almost 99% of its value.
The Luna is tethered to Terra USD and keeps it tied to the USD. When Luna prices slumped, investors could easily switch over to the Dollar. The devaluation of the Luna was the cause of its price volatility.
Terra is linked closely to Anchor Protocol. It pays 20% as a rate of interest. It attracts investors by providing solid returns. But when Anchor announced that variable rates were in place instead of the 20% rate, investors started to sell their holdings, leading to the mass dumping of the Luna investment.
On May 11, Luna prices slumped to below 1 cent. Investors preferred to protect their crypto investments and downloaded all their holdings. It was a massive sell-off that led to the Luna price crash.
The crypto market has many investors in the age group between 19 and 29 years who lost more. Hard-earned savings should not be invested into virtual digital currency. It is best to invest only what you can afford to lose. Volatility is the charm of the crypto markets, and investors should be willing to accept both losses and gains.
Terra Luna is a close competitor to Ethereum and has many investors. The recent collapse in prices wiped away the hard earnings of millions of users. It may make a comeback predict analysts.
Crypto Market Volume Falls
The crypto market lost almost $2 trillion of its total value.
Crypto prices saw high volatility last week. There is a broad sell-off in cryptocurrencies. Apart from the crypto, the share and the forex markets too see heavy selling.
In November, the total value of the crypto market was $3.1 trillion. It is currently at $1.3 trillion. TerraUSD fell sharply and caused a strong decline in the entire crypto market. The crypto market volume declined, and Luna saw a sharp fall in prices.
The crypto market crash of last week wiped off money from people who had invested in the crypto market. The broader ecosystem fell with the collapse of the Luna and UST.
Tether stablecoin slipped below the Dollar parity. Tether USDT, Binance USD, and USD Coin USDC are some of the large stablecoins preferred by investors. The Luna jitters are reflected in the price value of other stablecoins too.
Bitcoin Prices AT $30,000
Bitcoin prices (BTC) fluctuate at the $30,000 levels as prices move back and forth at this price level. BTC prices are moving within a small range at this level with high volume. The low-priced BTC prices attract new investors.
On Thursday, Bitcoin prices slipped to $25,500, and Ethereum fell to $1,700. ETH prices have recovered to more than $2000 this week.
Binance (BNB) is the fifth biggest crypto in terms of market capitalization and lost almost 13% last week.
Companies like Tesla and MicroStrategy had made investments in Bitcoin last year. The fall of more than 50% in BTC prices is a big loss to big institutions.
El Salvador, the country that has legalized cryptocurrencies and made huge investments in Bitcoin, lost most of its investments.
Stock markets are also on a sharp decline. The coronavirus pandemic and the Russian war on Ukraine are a few reasons for high inflation in the global economies. Inflation is at its highest level in the US at a 4-decade high.
Terra Price Predictions
Experts are optimistic about the future Terra Luna prices. It will perform well and may hit $1 by the end of the year 2022.
Luna prices will improve once the Terra ecosystem is cleared. The DeFi ecosystem is progressing well, and Luna will rise soon, expect investors.
The bearish sentiment spread to the overall crypto market. The crypto market capitulation lost almost $200 billion in just two days.
The crypto market is an extremely risky investment sector.
Investors should consult experts before making any investment decision. The crypto market is unregulated but has captured the attention of investors and traders with its huge volatile price swings.
Bitcoin, Ethereum, ADA, Cardano, and Solana, the top cryptocurrencies in the market, lost more than 10% this week. Dogecoin lost almost 3%. High inflation in the US, which is at multi-year high levels, is another reason for the declining crypto prices. Food and general merchandise prices are soaring higher. Customers have to pay more for their basic food requirements.
