Terra Luna had found itself a nice sweet spot among some prominent blockchains before but now it has drowned in the red sea and it's likely it will not come back from this. Most major Cryptocurrencies departed from the all-time highs 6 months ago but just a month ago Terra set its all-time high of $119 and this proves that it was getting stronger each and every day. Of course, what goes up must come down but what happened to Terra shoe that there was too much violence and it was severely brutalized and just some minutes ago it fell and has set an all-time low of $0.00003644.
When investors are taking off their profits from the table they sell their volatile coins and buy stable coins since they are stable in value and pegged at $1. Terra had its own stable coin called TerraUSD (UST) and it's so sad it was involved in this horrific turmoil.
Possible Reasons for Luna Crash
On 9 May t was reported that Luna had emptied their BTC reserve wallet and at the moment the TerraUST was trading at 0.95 and Luna was now 32% down. This move triggered the emotions of traders and investors all of a sudden the TerraUST fell hard and was now trading at around $0.5. When the market is bearish investors find refuge in Stable coins, but imagine you are in a crisis and you are expecting someone to save you and you see that person struggling with his own troubles obvious you will be hopeless. This is exactly what happened w TerraUST, investors were supposed to find refuge there but it was crushing and it left them with no option except to sell Luna. From there it stopped raining and it was now pouring into the Luna Ecosystem and Luna fell like dominoes to its current all-time low.
Indefinite Luna Supply
When things get out of hand we expect it to be improved with time but on LUNA it's getting worse each and every day and that is why I doubt it will ever recover from this blow. We know that too much supply will result in low demand and a drastic fall in the price. If you check terrasco you will see that the LUNA supply is always increasing and it's now sitting at 6,907,376,873,996, more like a meme token, and tomorrow we will have a new big figure.
It's now an inflationary token and in about 3 days it increased from 728 million to 6.9 trillion, everyone is just selling what they have and I think everyone who is holding LUNA saw his/her portfolio going to dust, and it's now just a worthless pennies in their wallets. The LUNA developers shut down their blockchain after validators agreed on that decision. Then Crypto.com suspended the trading of LUNA and any tokens operation in the LUNA ecosystem. Even if it happens that it's back online, they will lose a lot of investors because now people have lost faith in it because so much happened in a short space of time.
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