Bitcoin and Ethereum higher on the strong volatility of the new LUNA
By Noemi Jansana / Alejandra Zamora
Date: Monday 30 May 2022
(Sharecast News) - The cryptocurrency market is benefiting from the return of risk appetite to the markets on Monday, after the reopening of major Chinese cities encouraged investors. Shanghai, in particular, launched a series of measures to boost its economy and to boost investment again, which is encouraging the stock markets. As for digital assets, both Bitcoin and Ethereum are leaving advances of 5%, while also noticing the shakeout of the new LUNA, which experienced strong lurches in its prices after its debut, from the hand of Terra 2.0.
Do Kwon's blockchain was finally refloated according to the Terra co-founder's plans. The market is trying to put the LUNA blockchain and UST stable coin fiasco behind it, however, volatility is taking its toll on the new token, as it is seeing prices fluctuate between $4 and $30. The new digital currency tarted trading on most crypto exchanges, but its price experienced a roller coaster ride on almost all of them. The price is stable around $6 on Monday, according to CoinMarketCap data.
CoinMarketCap data reveals that the cryptocurrency generated around $230 million in trading volume in the last 24 hours. As reported yesterday by 'CryptoPotato', Terra 2.0 was launched with the support of many platforms. LUNA holders have already started receiving the new 'cryptos' via the 'airdrop' mechanism, whereby they receive as many new tokens as they own old ones.
"The launch of Terra 2.0 is an essential event for the industry after the massive collapse of Terra 1.0. It will be incredibly difficult for traders to believe in Terra 2.0, but speculators will be keeping a close eye on its price," commented Naeem Aslam, analyst at Avatrade. "Crypto traders were badly burned during Terra's downfall, and it's not going to be easy for its creator, Do Kwon, to win back the community," he added.
These events impacted the price of all other tokens, leaving advances of around 5%, with the total market capitalization at $1.27 trillion. Bitcoin jumps to nearly two-week highs above $30,500, while Ethereum rises above $1,900 and is still dragging last week's declines on fears that work on a protocol change to its namesake blockchain is not going as well as the market expects.
"Traders are keeping a close eye on the correlation of cryptocurrencies with the stock market. Over the past week, we saw higher moves in the stock market, but we didn't see the same enthusiasm in the cryptocurrency market, which means the correlation between the two is under threat," Aslam stated.
All in all, the market queen hasn´t quite left the price range in which it´s been consolidating for days. The lows of the last three sessions were marked around $28,500, a price level strongly defended by the bulls, while the highs remain capped, at least for the time being, at $30,000. Experts indicated that at some point "we will see a relief rally".
The million-dollar question is when? "Many analysts suggest that investors should prepare for a 'crypto winter' with plenty of downside ahead," the experts at Libertex indicated. That's not to say there won't be occasional bounces, but there could also be more downside.
"Many traders were burned by the price rises and falls," commented Lark Davis, analyst at The Wealth Mastery. "Many investors are exhausted from buying on dips that keep falling, as everyone is spooked by the macro picture, with the impending recession in the US and the massacre of stocks," he added.
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