At the time of writing, there is very high volatility and panic has broken out on the cryptocurrency markets, after the Terra protocol failed to find a solution to curb sales on Terra (LUNA) and its stable coin Terra USD (UST).
Losses on LUNA are around 90% and on its stable coin TerraUSD (UST) around 50%, losing the anchor to the US dollar and the peg and attempts to recover it through LUNA and Bitcoin reserves have failed.
Do Kwon – the co-founder – has declared a recovery plan that, at the moment, is not known what it is based on.
This shock on the crypto markets has dragged all the major cryptocurrencies down, Bitcoin’s weekly balance is currently -30% at $ 27,460, Ethereum’s balance is -36.70% at $ 1,857.
On a technical level, Bitcoin broke the support of June and July in the $ 28,400 area which now becomes clearly resistance. This week we put the weekly chart to better see what happened. If there is no quick return above this important level ($ 28,400) the down trend could continue for a few more days.
Also on Ethereum we put the weekly chart. Unlike Bitcoin as the last bulwark, the support in June and July is in the $ 1,650 area (green line on the chart), even if the break of $ 2,130 (red line on the chart) now becomes resistance and it is not a positive sign.
We conclude by saying that last Tuesday’s CPI figure of 8.3% in the United States was higher than estimates and it depressed all financial assets a bit for fear of the inflation peak that has not yet materialized.