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Cryptocurrency LUNA Price Drops 14% After UST Stablecoin Loses Its Correlation Briefly

Cryptocurrency LUNA Price Drops 14% After UST Stablecoin Loses Its Correlation Briefly

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Answer Cryptocurrency LUNA Price Drops 14% After UST Stablecoin Loses Its Correlation Briefly

The price of the digital currency LUNA has fallen by more than 14% in the past 24 hours, making LUNA the worst performing cryptocurrency among the major cryptocurrencies.

This in turn led to a decrease in the total market capitalization of LUNA and UST, which are now worth $21.5 billion and $18.6 billion, respectively.

Yesterday Saturday, the digital stablecoin UST briefly lost its peg after someone dumped $300 million worth of UST digital tokens on exchanges “Curve” and Binance.

Some Project Terra enthusiasts believe it was a coordinated attack orchestrated by one side in order to damage the iconic Project Terra.

The user “Route2FI” told Twitter that he was satisfied that the connection would be restored since there was enough money in the system to make a backup.

Read:India’s central bank tells banks there is no ban on cryptocurrency

Twitter user Bitfinex’ed noted that withdrawing your cryptocurrency is normal and not a coordinated attack.

Terra co-founder Do Know dismissed these concerns on Twitter, claiming he loves chaos.

The UST digital stablecoin has already become the third largest stablecoin by market capitalization.

Some critics warn that algorithm-based stablecoins are inherently fragile because they are not backed by dollars.

It uses a complex arbitrage system in order to maintain its peg.

Notably, the Terra team recently announced the addition of Bitcoin reserves to ensure the stability of the stablecoin during market turmoil.

Earlier this week, the Luna Foundation Guard (LFG) announced a $1.5 billion bitcoin purchase, but failed to move the market.

Read:Decentralized Finance Project “Cream Finance” Facing Quick Loan Attack Again, Losing $18 Million

Read also:

Here are the influencing reasons why the bitcoin price has fallen over the past two days

SEC Approves Valkyrie Bitcoin Futures ETF


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