Terra’s (LUNA), has been in sharp decline since the beginning of the week. The ecosystem, which is well-known for its stablecoins, is currently experiencing its worst crash in several months. There are concerns that it is only the beginning of a downward spiral. These are the most recent developments:

• LUNA has fallen by nearly 90% over the last 24 hours, following two days of steep losses.

• The crash occurred because its stablecoin, UST, lost significant value against USD.

• UST has dropped sharply after showing signs of recovery

Data Source: Tradingview

Why is the LUNA crash still not over?

In the last few days alone, Terra (LUNA) has seen a sharp decline of over 170%. This crash is the most severe in the stablecoin platform’s history. After its main UST stablecoin lost value against the dollar, the steep losses occurred.

UST can be pegged to the US dollar at a rate of 1:1. At one point, the stablecoin was trading at around 70% less than the value of the dollar. Many LUNA investors panicked and the sell-off began. Although UST had initially shown some improvement, these gains have been sharply reversed.

LUNA is likely to be under significant selling pressure. Investor confidence in UST has been severely damaged and it will take some time for the coin’s recovery to be restored. In the next few weeks, we can expect a sharper drop in token prices.

What’s Terra’s long-term outlook?

Despite the UST scandal, Terra is still one of the most popular stablecoin platforms. This incident will, however, have a significant impact on LUNA’s short-term price.

But we expect the platform will recover over the long term and investors will be more confident once UST has regained its 1:1 ratio with the dollar.