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Terra price had sliced through a key support area, flipping it into resistance. As LUNA traded around the familiar territory, there was a chance that market participants might drag the altcoin further down in hope of collecting liquidity. The recent news on the Luna Foundation Guard (LFG) aimed at safeguarding the firm's stablecoins from volatility did little to rekindle hopes of a spike in LUNA price.
Terra Labs, the company behind the Terra blockchain announced the launch of the Luna Foundation Guard (LFG), a non-profit organization proposed to support the Terra ecosystem and safeguard the stability and adoption of its most popular stablecoin-UST.
The price of LUNA the native cryptocurrency of the Terra blockchain has experienced a panic selloff that saw it drop over 20% on the day, before staging a rebound. LUNA fell to an intra-day low of US$30.18.
The cause of the sharp drop originates from recent revelations in the crypto market that has LUNA holders worried. The co-founder of Wonderland (TIME), a DeFi lending protocol that is loosely connected to the Abracadabra Protocol, was found to have a history that is not so stellar. Michael Patryn who is the person in question was exposed to have been one of the co-founders of QuadrigaCX, a Canadian crypto exchange that went bust in 2019 siphoning off over US$133 million of investors' money. Patryn also previously spent 18 months in US prison after pleading guilty to offenses that included credit fraud, bank card fraud, and computer fraud amongst other crimes.
Interestingly enough, the ascending trendline constitutes a rising wedge pattern in conjugation with another upward trending line above. Rising wedges are bearish reversal setups, so their occurrence on Terra's weekly chart suggests more downside is probable.
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