Major sell-offs crash TerraUSD and its backing coin LUNA
Yesterday we reported that the Terra UST stable coin had lost its peg to the US dollar and slipped to a low of $0.97 on Monday, May 9. Increased selling pressure on LUNA, which has lost over 60% in the last few days, has caused UST to slip to $0.66, bringing Terra’s dollar peg mechanism into serious doubt.
Terra’s UST stablecoin is the fourth largest stablecoin by market capitalization and appears to be in a downward spiral that it seemingly can’t counteract. In the early morning hours on Tuesday, May 10, its price dipped as low as $0.66, that’s $0.34 away from its $1.00 peg and brings the pegging mechanism into serious doubt. It has now pulled back to around $0.90, but this is far from ideal.
Meanwhile, the Terra blockchain native token LUNA has also been in free fall, dropping to $29 from $85 in the last six days. Alongside the falling price of LUNA is falling market capitalization for LUNA, which…