Bitcoin touches 11-month low while TerraUSD extends declines

Bitcoin swung between gains and losses after tumbling to an almost 11-month low, while the TerraUSD stablecoin continued its downward spiral.

The world’s largest cryptocurrency by market value fell as much as 6.2 per cent to US$29,085 before trading little changed. Analysts had been watching the US$30,000 level as a key threshold, with many projecting that losses could accelerate once the coin falls below it. 

Meanwhile, the TerraUSD algorithmic stablecoin continued to spiral lower, trading at less then 30 cents. Backers of the coin are trying to raise about US$1.5 billion to shore up the token after it crashed from its dollar peg, according to the founder of a firm that was approached about the deal.  

“Bitcoin and cryptos have become a risk-on/risk-off trade this year and the CPI data is a risk-off development,” said Matt Maley, chief market strategist at Miller Tabak + Co. “As for Terra, this news is having an impact as well. Its collapse is lower confidence in an asset class that has been losing confidence among investors all year.”