Terra’s LUNA Drops Down Over 80% in Past 24 Hours

LUNA Shades 43% in Past 1 Hour Alone

Terra's LUNA continued its third consecutive day of slide as it falls down to 82.6% in the past 24 hours to reach price levels previously seen in August 2021.

The price action represented one of the biggest drops for a major cryptocurrency. According to data from CoinGecko, LUNA prices have dropped 93.5% in the past week and 43.9% in the past hour alone. The tokens are now down 94.7% since lifetime highs of $119 in April 2022, just more than a month ago.

LUNA is now the 34th largest cryptocurrency by market cap, despite being within the top 10 just days ago.

Terra's UST Too in Free Fall

Terra's stablecoin, TerraUSD (UST), lost its dollar peg for the second time in three days, falling to as low as $0.35, losing 60.5% in the past 24 hours.

The fall was so steep that the market cap of Terra dropped below the market cap of its stable coin UST, according to the data from CoinGecko. Even it dropped down to the 18th spot among the largest crypto tokens from the eighth spot.

Since the UST is pegged against the US Dollar, Terra maintains a collateral reserve in the form of its LUNA tokens. When the UST exceeds $1, users are incentivised by the Terra protocol to burn LUNA tokens and mint UST. The protocol reverses its incentives when the UST drops lower than $1 to help maintain its stability.