When the Terra platform collapsed in May, TerraUSD plunged in value, undermining trust in digital assets, including stablecoins. Although the main stablecoins managed to stay aloft, a lion's share of the crypto market recovered just partially. The value of both Luna and UST plunged to almost zero, resulting in a combined loss of $60 billion – the approximate capitalization of all issued tokens and coins. By issuing the arrest warrant, South Korea has once again shown its tough and uncompromising stance on the crypto industry.
Terra's collapse triggered a row of investigations not only in South Korea but also in the United States, urging local authorities to establish regulatory frameworks and control over stablecoins - digital tokens pegged to the dollar. Notably, investors can trade and invest in cryptocurrencies thanks to stablecoins as they simplify the transfer of funds in and out of crypto exchanges.
In July, prosecutors raided the home of Terraform Labs co-founder Daniel Sheen as an investigation found he was also involved in illegal activities behind the collapse of TerraUSD. Meanwhile, Kwon just said he would cooperate when the time came. The relaunched Terra token dipped by more than 16.0% in an hour when the news about the arrest warrant broke.
From the technical point of view, a plunge in bitcoin yesterday marked the beginning of a long-impending correction. Bulls are now focusing on the nearest resistance level of $20,540. In case of a breakout through the barrier, the price could soar to $21,140. In order to build a stronger uptrend, bulls will attempt to break above the resistance levels of $21,840 and $22,520. If BTC still feels pressure, which is highly likely, bulls will do everything to protect $20,007 support, which was tested in the course of the Asian session today. Should a breakout through the barrier occur, the price will head towards $19,520 with the target at $19,100.
Ether also posted significant losses yesterday. Bulls are currently trying to regain control over the market. The closest target is now seen at the resistance level of $1,620. In case of a breakout through the mark, a reversal to the upside will take place. More distant targets stand at $1,681 and $1,743. If pressure on the instrument increases, bulls should protect the level of $1,550, as this is the only way to maintain control over the market. If the price breaks through the barrier, ether will plummet to $1,495 with the target at $1,418.
