Over the past day, Bitcoin has broken through all conceivable support zones and slowed down the fall only at the edge of the abyss – near the $30k mark. At the same time, something strange began to happen with the recently released stablecoin from the Luna Foundation. The asset began to lose its peg to the US dollar and fell to $0.92. The course of the coins was never restored, and according to confirmed information, the Luna Foundation sold all the Bitcoins that served as a reserve for the stablecoin.
The stablecoin's current functional problems would be nothing special if it didn't happen in the midst of a massive bearish trend. Based on the current information, the UST rate lost its peg to the US dollar and began to fall in price. The price drop of the stablecoin was 8.5%. At the moment, the price reached $0.66, after which it began to recover. In this situation, it is important to note that Terraform has stated that it will use Bitcoin as collateral. The company's total investments in the main cryptocurrency amounted to more than $1.5 billion.
However, due to the stablecoin situation, the entire reserve fund in Bitcoin was depleted. The company announced the sale of 42,530 BTC to protect UST quotes. Despite this, the price of the stablecoin fell to $0.6, and only after that, did it begin to recover. The implementation of BTC to maintain the rate of a stable cryptocurrency was unsuccessful, and quotes continued to decline. In addition, LFG had to part with all Bitcoin holdings on its balance sheets, which put an additional burden on the price of the asset and allowed it to reach a round mark of $30k.
Bitcoin was also among the losers, because the first information about the sale of BTC coins appeared when the price of the stablecoin remained at $0.9. Despite the implementation of Bitcoins, it was not possible to stabilize the situation. This can be a strong blow to the position of the main cryptocurrency as a reserve and stable means. It can be assumed that the main problem in maintaining the UST rate was the lack of liquidity, which fell due to the collapse of Bitcoin. This also makes the asset an extremely dangerous savings vehicle in a bear market. And even considering that the situation with UST is unique, no investor will want to risk their products and capital by relying on BTC, which can lose 17% of its liquidity in 5 days.
As of May 10, selling pressure continues to grow. The balance of coins on cryptocurrency exchanges continues to grow, and large coin holders have joined the sale. Wallets with balances between 100 and 100,000 BTC have started selling coins. Technical indicators also demonstrate a local upward momentum. The RSI and the stochastic oscillator broke through the 40 level and entered the bullish zone, but there are no prerequisites for the development of a bullish momentum. MACD continues to move below the zero mark, which indicates the absolute dominance of the bears.
At the same time, the first prerequisites for the formation of a local bottom are visible. The number of long positions opened by large investors is starting to grow, indicating that the final point of decline is approaching. The Fear and Greed Index also reached extreme fear levels, followed historically by easing and an upward reversal. However, given the growing volume of coins on cryptocurrency exchanges, there is every reason to believe that the price will test the $30k level again. If the trend worsens and sales continue to grow, then there is a chance to update the local low at $27.8k, but the main goal remains to protect the round mark.
