Terra (LUNA) has continued to plunge sharply since the start of the week. The ecosystem known for its stablecoin has suffered one of its worst declines in months, and there are concerns the downturn may not be over. Here are the latest important developments:
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LUNA fell almost 90% within a 24-hour period following steep losses over two days.
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The collapse coincided with Terra’s stablecoin UST losing significant value against the US dollar.
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UST plunged again after briefly showing signs of recovery.
Data source: TradingView
Why the LUNA decline may not be over
Over just a few days, Terra (LUNA) experienced a dramatic drop exceeding 170%. This crash ranks among the most severe episodes in the platform’s history and followed UST—its primary stablecoin—depegging from the dollar.
UST is designed to be pegged 1:1 to the US dollar. At one point, the stablecoin traded roughly 70% below the dollar peg, triggering widespread panic among LUNA holders and prompting heavy sell-offs. Although UST showed a modest recovery afterward, that rebound reversed sharply.
LUNA is likely to face continued selling pressure. Investor confidence in UST has been severely damaged, and restoring trust will take time. Given the current market dynamics, further steep declines in LUNA’s price are possible in the coming weeks.
Long-term outlook for Terra
Despite the UST crisis, Terra remains one of the larger stablecoin platforms globally. Nonetheless, the incident will almost certainly weigh on LUNA’s price in the short term.
From a longer-term perspective, recovery is possible. If UST can regain and maintain its 1:1 peg to the US dollar, investor confidence should gradually return, which would support a stabilization and potential rebound for the ecosystem over time.