[Bitcoin Now] Luna Crisis Keeps Price Around $29,000... Investor Sentiment Is 'Fear'

[Image source=Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The price of the leading cryptocurrency Bitcoin showed an upward trend but remains around the $29,000 level due to the aftermath of the Luna incident.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 10:29 AM on the 25th, the price of Bitcoin recorded $29,615 (approximately 37.44 million KRW), up 1.55% from the previous day. Although Bitcoin's price, which had fallen to the $28,000 range on the 24th, showed some recovery, it is still moving around the $29,000 level.

Bitcoin's price, which was in the $39,000 range as recently as the 5th of this month, plummeted after the Luna incident. When the price of TerraUSD (UST), a stablecoin designed to be pegged to $1, sharply dropped, the price of its sister coin Luna also crashed. Unlike other stablecoins backed by safe assets such as cash or government bonds, Terra applied an algorithm that maintained its value through Luna. However, due to concerns about an economic recession and other factors, the prices of Terra and Luna fell, and as a result, the prices of other cryptocurrencies including Bitcoin also declined.

Edward Moya, Senior Market Analyst at global investment firm OANDA, explained, "Investor sentiment toward risk assets has fallen off a cliff, placing Bitcoin in a risky zone." Josh Ollswitz of global asset management firm Valkyrie told cryptocurrency media CoinDesk that for Bitcoin's price to establish a foothold at the bottom, volatility needs to calm down.

Investor sentiment remains in a state of 'fear.' Dunamu, which operates the domestic cryptocurrency exchange Upbit, reported its Digital Asset Fear & Greed Index at 32.08 on this day, indicating a fear stage. This is an increase of 0.78 compared to 31.30 (fear) the previous day. Furthermore, it rose 10.38 from 21.70 (fear) on the 18th of this month, a week ago. 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)’. A movement toward greed indicates increased buying interest among market participants, whereas a shift toward fear reflects a fear of asset decline, leading to market exits and a chain reaction of price drops.

This content was produced with the assistance of AI translation services.