Terra One of Few Cryptos in Green While Bitcoin, Others Slide

Terra One of Few Cryptos in Green While Bitcoin, Others Slide

Crypto markets took a tumble in early European hours as financial regulators in the U.S. and U.K. took measures to curb growing inflation concerns earlier this week.

Bitcoin followed a slide in global technology stocks, falling nearly $1,000 in Asian hours on Friday. Sentiment was dented after the Bank of England opted to end its asset-purchase program on Thursday, following Wednesday’s decision from the U.S. Federal Reserve to taper its bond buying program. Asian stock indexes fell, with Japan’s Nikkei 225 losing 1.79% and the Shanghai SE Composite dropping 1.16% on Friday, while the Nasdaq Composite index fell 2.47% Thursday.

Tokens of Terra (LUNA), a high-speed blockchain, were among the only cryptocurrencies to post gains with a 6% increase over 24 hours. They rose to a high of $67 Thursday before retreating to $64 on Friday.

“Cryptocurrencies and the traditional market are trading down today in an initial response to various Central Banks around the world cutting back on bond purchases and other stimuli introduced at the onset of the COVID-19 pandemic,” said Bod Reid, founder of crypto payments tool Everest, in a Telegram message.


Investors will return to crypto markets when the appetite for risk picks up, he said. “With interest rates increased, investors would tend to be more favorable to traditional investments ahead of crypto, however, with the higher ROI [return on investment] that digital currencies and DeFi offers, the nascent asset class may win in the long run.”

LUNA has remained in an uptrend since November following a community proposal to ‘burn’ tokens that pushed prices to an all-time high of $78. They have since mirrored a drop in the broader crypto market.

Technical indicators show strength for LUNA. It is trading above its 21-day exponential moving average – a tool used by traders to determine price trends based on historic prices – while the relative strength index (RSI), a momentum indicator that measures the magnitude of price changes, remains at a favorable level of 53.30.

RSI readings over 70 suggest an asset is overbought, and may be set to decline, while readings under 30 indicate the opposite.

Tokens of Solana also rose, adding 3%, and were the only other large-cap cryptocurrency in the green. Bitcoin fell 3.3%, following a rejection from the $49,200 level on Thursday, while ether fell 3.82% to $3,380 over the past 24 hours.

Despite the moves, funding levels on exchanges – the fee paid by traders to borrow money from exchanges to place bigger bets – remained positive for bitcoin, data from analytics tool Glassnode showed, implying traders are still placing bets on the upside.

Tokens of Elrond, Mina, and XDC Network were the biggest losers among all coins with a market capitalization of above $1 billion, data from CoinMarketCap showed. Their tokens have lost 14%, 7%, and 12% in the past day respectively.

A stand out among altcoins was YFI, the governance token of the Ethereum-based DeFi project Yearn Finance. YFI tokens jumped 18% on Friday after its developers announced the completion of a $7.5 million buyback, for 282.4 tokens, from the open market.

The move is part of a planned change in the project’s token strategy over the next few months. Yearn, like other decentralized finance projects, relies on smart contracts for financial services like lending, trading, and paying out interest to token holders and was one of the so-termed ‘blue chip’ DeFi tokens in 2020.

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