Crash in stablecoins drags crypto market, Bitcoin logs most volatile week in yrs

According to CoinMarketCap, the global crypto market value is currently $ 1.26 trillion, down 2.38% in the last day. At the same time, it has decreased by almost 27% of the total crypto market volume in the last 24 hours to $ 91.32 billion.

At present, the total volume of DeFi was $ 13.91 billion, 15.23% of the total 24-hour volume of the total crypto market. Furthermore, the volume of all stable coins is now $ 81.13 billion, which is 88.84% of the total 24-hour volume of the total crypto market.

Bitcoin today fell to today’s low of around $ 28,700. It picked up speed and managed to reach just over $ 30,000. However, it continued to trade volatile and is currently below $ 29,500. Bitcoin’s dominance is currently at 44.50%, up 0.17% during the day.

Ether gave up its $ 2,000 mark today and even reached an intraday low of $ 1,956.57. But at the moment, it stays a little over $ 2,000 at CoinMarketCap.

In the last seven days, Bitcoin fell by almost 18% and Ether lost more than 25%.

A sharp decline in stack coins has made crypto markets vulnerable in recent days.

According to a Bloomberg report, the extinction of the algorithmic stablecoin TerraUSD and its sister token Luna wiped out more than $ 270 billion from the crypto sector’s total value of trillions of dollars.

Notably, the report revealed that the weekly net change in Bitcoin volatility was the highest in the two years since Bloomberg first began recording data.

On Saturday, Tether is trading unchanged at $ 1. However, Terra USD is rising by more than 13% but is breathing just under 20 cents in the market.

Due to extreme volatility in Terra LUNA, the blockchain has been stopped. Terra validators are looking at a mechanism to recreate the network.

Terra (UST) Powered by LUNA via their Twitter account said on Friday, “The Terra blockchain has officially stopped at block 7607789,” adding, “Terra Validators has stopped the network to come up with a plan to reconstruct it.”

Terra LUNA is close to zero level. Last week, May 7, LUNA was around the $ 72 level. It has dropped by almost 100% in the last seven days.

Other platforms in crypto markets also could not escape sales bias on Saturday. NFT in volumes fell almost 29%, while in stock market value it fell almost 4%. Metaverse tokens dive 2.5% in market value and over 19% in volumes. Polkadot Ecosystem Tokens decreased by over 3% in market value and over 26% in volumes. Solana tokens fell over 2% in market capitalization and by 25.5% in volumes, while Avalanche tokens fell over 3% in market capitalization and fell almost 32% in volume.

Over the past seven days, FLOW token and ApeCoin have fallen by almost 37% and 38%. MANA lost almost 16%, DOT dipped almost 24.5%.

Risks in stack coins can be more manageable if they are backed up by reserve assets.

In Fitch’s view, stablecoins backed by reserve assets with a clear fiat currency value face a fundamentally different set of credit problems than algorithmic stablecoins. In such cases, the stability risks of stablecoins may be more manageable, depending on various factors, in particular the security and liquidity of the reserve assets.

Other factors relevant to the credit profiles of issuers of reserve-backed stablecoins include regulatory risk, counterparty risk (including reserve custodians), transparency of reserves and the extent to which the underlying assets are truly uncorrelated, the legal rights of stablecoin holders and governance and operational risks. , according to Fitch’s latest report.

Fitch said, “there could be significant negative repercussions for cryptocurrencies and digital finance if investors lose confidence in stablecoins. The latter play an important role in catalyzing the cryptocurrency ecosystem more broadly, by providing a stable link to fiat currency financial markets.”

Coinbase Institutionals Brian Cubellis and David Duong said in a report, “Interestingly, despite greater volatility than in January or December sales, volumes are still slightly lower in comparison, suggesting easier positioning as well as potentially reduced retail interest due to a difficult market environment, “Bloomberg was quoted as saying.

Analysts at Coinbase stated that Bitcoin’s threshold of $ 30,000 will be “a big resistance” if prices continue to consolidate below that mark in the next few days.

According to them, if things deteriorated further, the next guideline would be around $ 20,000, which was the highest ever during the previous 2017/2018 cycle.

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