The entire crypto market holds its breath as over a billion dollars gets liquidated, more details emerge about the LUNA crash, and will Tether become untethered?
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Let’s get it! For two years in a row, the crypto prophecy “Sell in May, Walk Away” remains true. And if you still don’t think we’re in a bear market, I really don’t know what to tell you at this point. The past week alone, the total crypto market cap has shed over $500 billion, falling from $1.7 trillion on May 5 to $1.2 trillion today.
As a result of this brutal sell-off, the market remains in extreme fear. zycrypto.com reports, in the past 24 hours, the total number of liquidations stood at $1.28 billion with over 411,000 traders being caught in the crosshairs. Crypto analyst Ali Martinez pointed out Bitcoin has broken a historic trendline that could send the price below down 40% to $20,000 based off the last two times this happened. He also mentioned that Bitcoin whales continue to exit the market as the Ethereum whales are buying the dip. In five years, when we look back on this 2022 LUNA crash, will it just be the first domino of the black swan event that leads to Ethereum flipping Bitcoin? It’s possible. If this week of max pain in crypto has taught us anything, it’s that anything’s possible. Is there any hope it’ll recover? How long will it take? Well, let’s pass it over to our guy Frankie Candles for a market watch.
Let’s go ahead and do a little market watch here. We’ve got Bitcoin coming in at $28,596. Down about 1% on the day Down 21% on the week We got Ethereum coming in at $1,900, guys. Down 8% on the day, 30% on the week It’s brutal out there, guys. It’s absolutely brutal. ApeCoin– let’s have a little positivity here. Let’s look at our top gainers. ApeCoin bouncing back to life Up 32% on the day And also still down But still down 46% on the week Amp up 11% on the day Quant up 11% on the day And Maker up 8% on the day Guys, it is brutal out there. We are just continuing to bleed. We got a little bit of a bounce after we wicked down to about $25,350. Got a nice little bounce there, but nothing really to write home about. But trust me. It’s the hard times in crypto that makes millionaires. So always remember that.
As the tragedy of LUNA continues to unfold, more details emerge about the downfall of its stablecoin UST and the price of LUNA itself. Yesterday, the internet was theorizing that crypto exchange Gemini and hedge fund giants BlackRock and Citadel were responsible for the sell-off that caused UST to crash. Since then, Gemini stated that they made no such loan, and BlackRock and Citadel have both come out and said that they do not trade UST. Although it’s still unclear who the culprit is, the price of UST is still below 40¢. And in the wake of this catastrophe, Janet “Felon” Yellen has stated that there will be stablecoin regulation in place before the year ends. It’s not fair to use the UST crash as a sole reason to regulate stablecoins because the top three stablecoins are not algorithmic like UST is. As for the price of LUNA itself, it’s plunged over 99% today, and it’s now barely trading above a penny. It’s terrible that $1 million of LUNA four days ago is worth about $185 now. This has happened because of LUNA’s relationship with UST. Basically, in the past, if UST went above $1, it would burn LUNA to keep it on the peg. This is part of the reason it ran up so fast last year. Unfortunately for the LUNAtics, that mechanism is a two-way street. Because the more LUNA falls in price, more LUNA gets minted. Now, LUNA is barely a penny because in the past four days, the supply of LUNA has gone from 346 million to 7.1 billion.
As if we needed any more shakeups in the stablecoin world after seeing what happened with LUNA and UST, due to the total crypto market cap losing $500 billion in a single week, major price capitulation panic selloffs, record stablecoin outflows, the price of Tether temporarily lost its peg and wobbled down to 97¢. Unlike UST, the short hiccup did not stop Tether from honoring its $1 redemptions despite market volatility. To fix the issue, Tether moved $1 billion from Tron to Ethereum and $20 million from Tron to Avalanche without changing the supply during the process. The price of USDT has already restored itself to 99.7¢ and has honored every redemption regardless of the wobble. Although Janet Yellen will probably try to use this against Tether, she really can’t. Because despite the hiccup, they honored the peg and protected the investors, unlike herself and the SEC have ever done. The takeaway from this is that Tether was able to recover because it’s not an algorithmic stablecoin, and the distinction between the integrity of the two should be taken into account before the government oversteps their boundaries.
This article is a transcription of a video made by BitBoy Crypto
Original video: https://youtu.be/tlpCu_STijM