The cryptocurrency gains momentum after the price of stablecoin TeraUSD loses 1 to 1 peg with USDcurrencySelling pressure in the market intensified, cryptocurrencies underpinning some of the most popular decentralized finance protocols (DeFi) fell, and capital flight down.BitcoinIt continued to decline on the 12th, falling below the $27,000 level to hit a 16-month low.
Bitcoin is down more than 6% on 12th to $26,850, its lowest since December 2020, while Ether is down 12%; The favorite cryptocurrency avalanche in the decentralized finance space is down nearly 34%, while Solana is down more than 30%, with Awe down 25%.
The TeraUSD algorithmic stablecoin is fluctuating between 30 cents and 90 cents after falling below the $1 price. At around 2:30 PM on the 12th, Taiwan Time, the price was around 60 cents, while its related token Luna fell. About 95%.
According to the Wall Street Journal, stablecoins are becoming increasingly popularInvestmentLoved by the masses, it is a type of cryptocurrency known for its “stable” currency value. While most popular stablecoins are backed by assets such as the US dollar and US dollar-denominated debt, to hold their prices in a traditional currency or a basket of currencies, TeraUSD is an algorithmic stablecoin that maintains financial engineering. it depends on. US dollar exchange rate.
The de-pegging of TeraUSD from the US dollar began over the weekend with a series of massive withdrawals of TeraUSD from the decentralized bank Anchor Protocol.
Aaron Brown, a cryptocurrency investor writing for a Bloomberg Opinion column, said that the collapse of TeraUSD or UST eroded confidence in all liquidity protocols. If UST fails, Aave can fail as well. In a way, when Bear Stearns failed, the focus was on whether or not Lehmann would fail.
“Has the market panicked because of what happened with TeraUSD? The answer is yes,” said Craig W. Johnson, chief market technical analyst at Piper Sandler, over the phone. Bitcoin now needs to hold $28,000 and drop below it. This level could trigger a new wave of selling.
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