OH LUNA!

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I’m definitely not the only one seeing this, it seems so unreal and soul breaking. Our new favorite Layer 1 block chain Luna just dropped 50% under 24 hours and easily is the worst performing asset on anyone’s portfolio right now.

In the last 24 hours, a lot has been happening, nothing good, just a nightmare period for financial investors. Oil is down, stocks are down, metals are down, cryptocurrency is down, bitcoin lost more than 10% in the same 24 hours. Alts? What is alts? I can’t find any, just a pool of red candles. So, What happened? Did Russia do something new? Or is it China this time? Or perhaps, it the great recession looming; can’t be, the US Dollar DXY is at a peak never seen in the last 20 years, when the dollar performs this good, investors tend to hold on to it, coupled by the interest rate hike by the feds, the dollar is the best bet for a zero risk investment(that’s assuming inflation wasn’t stealing the headlines.

Now, over to Terra and their tokens; LUNA and UST. Recently Terra, the company behind LUNA blockchain made the headlines for purchasing bitcoin and a basket of other cryptocurrency to support the peg on their stable coin UST. instead of going with the traditional USD pegging system, Terra foundation cited inflation and other local economic condition that could affect the local currency as reasons why the UST was not going to use the USD as a peg for its stable coin, so they went on a buying spree purchasing nearly $10 billion worth of Bitcoin.

The news was well received and applauded by the crypto world, till recently when bitcoin and the other cryptocurrency went into a carnage mood, there were moments of slight depegging as the USD gained strength. Hours into Monday, 42,500 bitcoin(roughly worth $1.4 billion) was moved from the Luna wallet, this caused panic for traders and investors, if this asset were to be sold in the open market, GAME OVER! Bye bye!

This led to a panic sell by Luna and UST holders which only made matters worse, driving the UST peg below $0.8 and sent the price of Luna crashing over 50% on the day and 82% from all time high.

Luna 4hr chart

The move came less than a day after the Luna foundation guard announced that it is taking decisive steps to proactively defend the stability of the UST peg and the broader Terra economy. Measures included loaning $750 million worth of UST to accumulate more bitcoin as market conditions begin to stabilize.

Investors are watching with keen interest and eyes would be on Luna from here. Would it make a big bounce? Or would it go axie infinity?

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