The market cap of the crypto asset continuously lost $200 billion within a day. Bitcoin suffers from bear market sentiment, breaking $26,000 to its lowest level in 16 months.
According to , the current cryptocurrency Market Cap records
The cryptocurrency market cap had a low of $1.4 trillion on Tuesday, well below its all-time peak of $2.9 trillion last November.
U.S. inflation data showed that prices for goods and services rose 8.3% in April, near their highest level in 40 years.
Investors are fleeing en masse as the U.S. hikes interest rates by 50 basis points to hedge against inflation. U.S. stocks also suffered a slump.
The price of Bitcoin plummeted to $26,700 on Thursday. This is the first drop below the $27,000 level since December 26, 2020.
Bitcoin then rebounded, at the time of writing, BTC rose 6.51%, and its trading price was $30,501, standing above the key technical level - $30,000.
Ether, the second-largest digital currency, fell to $1,800 per coin, which is the first time the coin has fallen below the $2,000 mark since June 2021. Ether has since regained lost ground and was the last trading at $2,084, up 3.4 %.
According to CoinGecko data, the cryptocurrency market was stunning because of the stagging plummet of LUNA, as its value almost lost from an all-time high of $119.18 on April 5 nearly a month ago to an all-time low of $0.027 on May 12, losing over 99%.
Also, the issuer of LUNA- the peg of TerraUSD (UST), the world’s fourth-largest stablecoin owned by Terraform Labs, lost its peg to the U.S. dollar, plummeting to an all-time low of $0.29 on May 11.
The Luna Foundation Guard is selling its billion-dollar bitcoin holdings to prop up its troubled stablecoin.
The collapse of UST has led to concerns that the market will spread to the rest of the dollar-pegged stablecoins. If a large-scale withdrawal occurs, it is likely that the remaining stablecoins such as Tether will not have enough reserves to support their dollar-pegged.
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