At the time of writing this article, Terra (LUNA) was worth $ 9.90, down more than 49% from a daily high of $ 19.58 earlier this morning.
Literate people already want to touch the ground, perhaps many are wondering, why LUNA is too bad to face bearish this time.
In just five days, LUNA has slipped over 88% from the $ 83 level, while Bitcoin (BTC) has already started moving positively being around the $ 31,000 zone since yesterday.
Not only that, TerraUSD (UST) has also lost its value against the US dollar, trading at $ 0.69.
On May 9, Luna Foundation Group (LFG) agreed to use a large amount of bitcoin and UST reserves worth $ 1.5 billion to salvage the value of LUNA and Terra’s stablecoin.
It is understood that the money was transferred to third trading companies (market markers) as a loan.
Terra CEO Do Kwon explained via Twitter: "This loan is intended to ensure that they buy UST if its value depreciates from the dollar and buy BTC if its value is higher against the dollar."
But today, it is rumored that LFG wants to find some big crypto investors to create funds worth over $ 1 billion with the aim of supporting UST through the purchase of LUNA at a 50%discount.
Only in this way can the value of UST be tied to the US dollar again. Why? Readers can read this article: LUNA Supply Drops To All -Time Lowest, Positive Signs For High Rocket! and What is Terra Cryptocurrency (LUNA)?
Actually, what happened? Here are the details:
Saturday, May 7 - LFG released a total of $ 150 million worth of UST from Curve.
There was a massive sale of UST.
Minutes later, an unidentified wallet had sold UST worth $ 84 million in Binance.
This situation invites UST’s demand imbalance on the Curve, prompting more investors to sell stablecoin
Monday, May 9 - UST was down 24%, $ 0.75 per unit, the biggest decline for stablecoin assets, and LUNA touched the $ 30 price level from $ 65 on Sunday.
Tuesday, May 10 - LFG once again announced around 37,000 BTC lent to market markers for the same purpose.
In fact, Terra’s loan protocol, Anchor now offers 19.5% annual revenue percentage (APY) with UST’s stake in the platform accounting for 56% of the total current supply.
However, so far there are still no signs for LUNA and UST to rise. Analysts think it will take a relatively long period to return to normal and according to experts, the algorithm stablecoin relies heavily on investor demand and confidence.
Losing both of these sentiments, stablecoin will ‘disappear’ from the market. Then, what will happen to LUNA?
So it is not surprising that any platform or protocol involved in UST collateral will see massive liquidity. For example Binance who had to block UST production yesterday.
Perhaps LFG can be the next buyer to save UST as since February they have bought BTC and Avalanche (AVAX) to support UST if there is no end to this problem.
Most LUNA investors have almost gone crazy witnessing a devastating price collapse.
Only market markers and big crypto investors can save the day. Or most tragically, both of these assets vanish.
This article ends when LUNA hit a value of $ 6.85, down over 81% in 24 hours and over 92% since last week.
While UST recorded a trading value of $ 0.54, down more than 40% since yesterday and almost 45% since last week.
