Terra ‘rescue plan’ still at large as LUNA falls below $5, Bitcoin spikes to '$138K' in UST
Panic appeared to set in on crypto markets overnight on May 11 as Blockchain protocol Terra failed to steady its bleeding cryptoassets.
Data from Cointelegraph Markets Pro and TradingView showed both the firm’s in-house token, LUNA and stablecoin, TerraUSD (UST) seeing fresh heavy losses on the day.
After a mass sell-off which some argued was "coordinated" to destroy the Terra ecosystem, UST lost its peg to the U.S. dollar.
Attempts to shore up the peg with both LUNA and Bitcoin (BTC) reserves failed, and as uncertainty gripped the market, both UST and LUNA dived to levels unimaginable just days previously.
Getting close ... stay strong, lunatics
Co-founder Do Kwon said that a “recovery plan” was due for release, details still scant at the time of writing.
Rumors circulating online suggested that other major crypto firms may be willing to contribute funds to support the peg.
On May 11, UST traded at just $0.27, having briefly dived to lows of $0.25, 75% below dollar parity.
LUNA/USD was at $6, down over 90% in May alone.
A further unintended consequence of the turmoil came in the form of BTC/UST reaching nonsensical levels of almost $140,000 on major exchange Binance, which suspended LUNA and UST withdrawals on May 9.
Reacting, it was a mixture of shock and nervousness about the recovery of the market that pervaded analysts' thoughts.
Related: Ethereum rises vs. Bitcoin despite crypto market rout — will ETH/BTC gain 50% by June?
Attention also focused on largest USD stablecoin, Tether (USDT), as Tether chief technology officer Paolo Ardoino appeared equally surprised at recent events.
Wow
Despite potential sell pressure on Bitcoin itself, however, the largest cryptocurrency had avoided a fresh dip below $30,000 at the time of
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