The earthquake continues in the cryptocurrency markets. The leading cryptocurrency Bitcoin slumped below $30,000 and hit a 10-month low. The climate of fear has reached its peak in cryptocurrencies, which have moved away from their historical peaks. Trying to equate UST to $1, Terra sold all his Bitcoins. Luna lost 97 percent of its value as a result of this failure. Market experts drew attention to what investors should pay attention to when interpreting the declines.
Those who invest in the Cryptocurrency markets have been unable to take their eyes off the screen in recent days. Cryptocurrencies started to lose big in a short time and the continuation of the declines is coming. After the Fed increased the interest rate by 50 basis points, the investments that were encouraged by the short-term small upward movement started to lose their money with the opposite movement. Fed Chairman Jerome Powell’s statement that interest rate hikes will continue in June and July, and that the Fed will begin to narrow its balance sheet as of June, led to a crisis in cryptocurrencies.
The compatibility of the correlation between the Fed’s balance sheet and cryptocurrencies deepened the sales. When the Fed increased its balance sheet, cryptocurrencies rose, and when it contracted, sharp decreases were seen.
Where will the fall stop?
Many investors lost their holdings due to experts posting charts, technical analysis and advice on social media. Claiming that Bitcoin will reach very high amounts by the end of 2022, experts remain silent in the face of the decline. Investors, on the other hand, are paying attention to where their losses will stop.
The downward movement that started under the leadership of Bitcoin caused huge losses in altcoins. Bitcoin fell from $ 40 thousand to $ 29 thousand in a short time. Bitcoin, which has fallen by 28 percent in a very short time, has also moved away from its historical peak by 58 percent. Along with Bitcoin, volatile cryptocurrencies such as Ethereum, Ripple, Solana, Dogecoin, Shiba Inu also suffered huge losses.
Luna effect
Terra’s stablecoin, UST, lost its stability again, falling to $0.31 despite recovery efforts. The Luna Foundation Guard failed to equalize the price even though it used all its Bitcoin reserves to maintain the UST’s $1 peg.
Luna, on the other hand, exhibited a dramatic decline and in a short time, she lost close to 97 percent. Luna was trading around $86 levels before the declines. Investors risked losing almost all of their holdings.
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