[Bitcoin Now] Luna and Terra Impact Push Price to $29,000 Range... Bearish Trend Expected to Continue for a While

[Asia Economy Reporter Myunghwan Lee] Bitcoin prices continue to show weakness due to the crash of the cryptocurrency Luna. However, altcoins are falling sharply due to investors' risk-averse sentiment.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:56 a.m. on the 13th, Bitcoin was trading at $29,308 (approximately 37.76 million KRW), down 0.73% from the previous day.

However, the decline in major altcoins is significant. At the same time, Ethereum was trading at $2,008.52 (approximately 2.5879 million KRW), down 5.45% from the previous day, and Solana was trading at $45.19 (approximately 58,200 KRW), down 10.12% from the previous day.

This decline in cryptocurrency prices appears to be due to the aftereffects of the crash of Luna and TerraUSD (UST) the previous day and risk-averse sentiment. Cryptocurrency specialized media CoinDesk pointed out that the sharp drop in altcoins is a signal of investors rapidly exiting risk assets in a risk-avoidance move.

There is also analysis that the downward trend in cryptocurrencies will continue for some time. Daniel Tachidin, CEO of BD Swiss, said, "With U.S. inflation figures coming in higher than expected, investors have started selling risk assets, which has affected cryptocurrencies in the process," adding, "Due to the sharp rise in interest rates, investors' preference for safe assets has increased, and cryptocurrencies may continue to decline for an extended period." He further added, "This weakness is exacerbated by the crash of UST, which has weakened investors' trust in stablecoins."

Meanwhile, Terraform Labs, the blockchain company issuing Luna and TerraUSD (UST), temporarily suspended trading as the two cryptocurrencies continued to crash. Bloomberg reported on the 12th (local time) that Terraform Labs halted the system to prevent attacks on the blockchain network where Luna and UST are traded and then restarted it.

The Nasdaq index, which is tech-stock focused and shows a correlation with Bitcoin prices, closed at 11,370.96, up 6.73 points (0.06%) from the previous session on the 12th, showing a flat trend. The Dow Jones Industrial Average closed at 31,730.30, down 103.81 points (0.33%) from the previous trading day, and the S&P 500 index closed at 3,930.08, down 5.10 points (0.13%) from the previous session.

Meanwhile, the Digital Asset Fear & Greed Index of Dunamu, which operates the domestic cryptocurrency exchange Upbit, recorded 19.29 on the day, indicating a "Extreme Fear" stage. This is an increase of 4.40 compared to 14.89 (Extreme Fear) the previous day. Dunamu's Digital Asset Fear & Greed Index is divided into stages of "Extreme Fear (0?20)," "Fear (20?40)," "Neutral (40?60)," "Greed (60?80)," and "Extreme Greed (80?100)." The greed direction indicates increased interest in buying by market participants, whereas moving toward fear indicates a fear of asset decline, leading to market exits and a chain reaction of price drops.