Cryptocurrency market recovers – At + 10% Bitcoin, Luna value is zero

LAST UPDATE 12:30

The collapse of stablecoin TerraUSD sparked widespread panic in the cryptocurrency space, but things seem to have calmed down significantly.

Terraform Labs has suspended, launched and resumed the Terra blockchain in the wake of the collapse of TerraUSD and Luna.

The developers working on the blockchain tweeted that the second suspension was aimed at allowing them to “come up with a plan to rebuild” the network. Both TerraUSD, the stablecoin algorithm that lost and did not regain the 1-1 link with the dollars, and the related Luna, were trading close to zero at the time of the second suspension.

But in the rest of the cryptocurrencies the climate had begun to recover. Tether, the largest stablecoin used in cryptocurrency markets to facilitate trading, has recovered from the initial mini-crash, allaying concerns that problems could spread to the wider market.

Cryptocurrencies that support key decentralized financing protocols have also been strengthened. Even ApeCoin recorded a rally, rising more than 35% in 24 hours.

The Bitcoin meanwhile traded higher than $ 30,000 after falling to $ 25,000 in the previous session. Some alternative currencies also rose, with bitcoin cash rising 20% ​​at some point before losing some of its profits.

In particular, the largest cryptocurrency in capitalization is rising 10% with its price at 30,610 dollars

The. Moves at similar rhythms Ethereumthe second largest that yesterday saw losses of more than 25% and the price fell to the range of $ 1,700, but today is also rising 10.1% and trades in 2,092 dollars.

This is a much more positive picture than the chaos that hit the cryptocurrency markets on Wednesday, as the UST entered a death spiral. That day bitcoin had fallen 10%.

The fact that Tether is stabilizing means that the margin calls made are weakening. Investors are still nervous, but sales have fallen. The market will remain nervous for a few more days, but the supply-demand equation has stabilized again, analysts say.

Market watchers noted that bitcoin, which is usually traded in parallel with the stock market, rose again, although the S&P and Nasdaq fell.

Finance Minister Yellen, meanwhile, said the fall of Terra showed the dangers of dollar-linked cryptocurrencies, but added that their collapse did not pose a threat to financial stability.

“Cryptocurrencies are of little economic importance. Not that many people have a lot of them,” said a Nuveen analyst.

However, he added that the cryptocurrency market is affected by the same forces that affect stocks at the moment.

“What is punishable when financial conditions get tougher? Anything with a high valuation and uncertain or non-existent revenue stream. And encryption has arguably high valuations and no revenue stream. This is something we see in emerging stocks, in technology. There is a correlation, but it is obviously more volatile because the market is less fluid. ”