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DeFi

LUNA dives 50% in a day wiping 10 billion from its market cap

May 10, 2022 - Around 2 mins mins to read
Terra (LUNA) has performed well in the preceding three months, with its price continuing to rise as the DeFi asset broke into the top 10 cryptocurrencies by market capitalization despite the cryptocurrency market’s gloomy sentiment. Nonetheless, following a recent slump, LUNA lost more than $10 billion on May 10, sliding from $21.01 billion to $10.96 billion at the time of writing, according to CoinMarketCap statistics.
LUNA dives 50% in a day wiping 10 billion from its market cap
LUNA lost more than $10 billion on May 10

Terra’s value had really dropped as low as $8.41 billion on the same day, before making a slight rebound the day. According to CoinCu data, the currency is now trading at $32.66, a decrease of 47.31% over the past 24 hours and a decrease of 62.14% in the last week.

LUNA dives 50% in a day wiping 10 billion from its market cap
LUNA 24h chart. Source: CoinCu

Rekt Capital, a cryptocurrency trading expert, has identified a bearish divergence that is currently occurring:

Notably, on May 10, cryptocurrency trading platform Binance announced that withdrawals of LUNA and UST tokens have been halted owing to “network slowness and congestion.”

In a statement, the company stated that it will reopen withdrawals for these tokens after it determined that the network was stable and the volume of pending withdrawals had decreased.

The Luna Foundation Guard (LFG) now has $171.4 million in USD in its reserves, which is down 85% from the previous day, and $86.82 million in UST, which is down 41% from the day before, and $84.5 million in AVAX in its reserves. 

The LFG’s reserves have been depleted as a result of the liquidation of its Bitcoin (BTC) holdings to maintain the peg. Surprisingly, eclipsed Tesla as the second-largest corporate Bitcoin holder on May 6.

LUNA dives 50% in a day wiping 10 billion from its market cap
LFG is the second-largest corporate holder of Bitcoin

It’s uncertain where things will go from here. Investors will be watching Bitcoin closely because if it continues to fall, LUNA will most certainly become involved. The slide from the all-time high of over $118 to $32 represents a low-risk buying opportunity.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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Author

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.