Crypto Market Dives – and Rebounds – Following UST De-Peg, US Inflation Report
Bitcoin (BTC), ethereum (ETH), and the broader crypto market experienced a sharp correction today after the terraUSD (UST) stablecoin collapsed, and an inflation report in the US revealed higher-than-expected price rises. However, prices later turned around, marking a strong recovery for the major cryptoassets.
As of 15:20 UTC, BTC traded at USD 31,459, up more than 1% over the past 24 hours and down 17% for the past 7 days.
BTC past 14 days:
Meanwhile, ETH – the second-most valuable cryptoasset – traded at USD 2,320, down 0.9% over the past 24 hours and 17% for the past 7 days.
ETH past 14 days:
The sharpest selloff started after an inflation report in the US on Wednesday showed that prices rose by 8.3% in April, more than the 8.1% that was expected by analysts.
Persistently high inflation is among the key factors that could cause the US Federal Reserve (Fed) to hike interest rates in the US at an even faster pace. Earlier this month, the Fed hiked rates by 0.5 percentage points, with Fed Chair Jerome Powell at the time indicating that a similar hike would be seen at the central bank’s next meeting.
Meanwhile, the drama surrounding the Terra (LUNA) network and its algorithmic stablecoin UST intensified on Wednesday, with LUNA collapsing to as low as USD 0.69 and UST touching USD 0.23 before both coins started a recovery.
At the time of writing, LUNA had already trimmed some of its losses from earlier, although it remained down by just over 90% for the past 24 hours to a price of USD 2.59. Over the same time period, UST was down by 43% to USD 0.51, still significantly below its USD 1 peg.
Commenting to Cryptonews.com, Marcus Sotiriou, an analyst at crypto broker GlobalBlock, said the higher-than-expected inflation numbers
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