The collapse of the TerraUSD stablecoin sparked widespread fear in the cryptocurrency community. However, things have greatly calmed down in the last 24 hours. Whales have been actively dumping their USDT holdings on the market following the risk of a de-pegging, according to the most current statistics from Santiment. The price of USDT briefly fell to $0.97 yesterday, but quickly recovered to $1.
Following the collapse of TerraUSD and its accompanying LUNA token, Terraform Labs suspended, restarted, and then halted again their Terra blockchain.
The second stop, according to blockchain developers, was to allow them to “come up with a plan to reconstitute” the network, according to a tweet posted to their verified Twitter account. At the time of the second stop, both TerraUSD (UST), the algorithmic stablecoin that dropped never regained its 1-1 peg to the US dollar, and the related Luna tokens were trading near zero.
Nevertheless, sentiment in the cryptocurrency market has begun to improve. Tether, the largest stablecoin used in cryptocurrency exchanges to facilitate trade, has recovered from a previous mini-crash, assuaging fears that its woes may spread to the rest of the market.
“The fact that Tether is stabilizing means that the margin calls that took place are fading,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Whenever you get forced selling in anything, it overshoots. People are still nervous, but the selling has abated. Investors will be nervous for a few more days, but the supply-demand equation has stabilized again.”
Key whale addresses sold $710 million of Tether in yesterday’s trading session alone, according to on-chain data. The enormous selloff is currently thought to be the world’s greatest one-day dump of USDT on whale addresses. Santiment has not supplied any information regarding the network to which these addresses were assigned.
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