Terra LUNA crash sparks caution in crypto market. What should investors do?

Top of the house cryptos Bitcoin and Ether also faced the brunt of selling pressure in stablecoins.

The crash in Terra sisters has still mind-boggled investors across the globe sparking cautions in the crypto market. Top of the house cryptos Bitcoin and Ether also faced the brunt of selling pressure in stablecoins.

The volatility stays in the crypto market as uncertainties around the stable coins after Terra sisters' free fall has raised questions over the stability in crypto assets. On Friday, the market surged in terms of valuation but nosedived in volumes. 

Notably, Bitcoin and Ether are recovering from their previous losses. Last month, Bitcoin made some heavy losses and neared the $25,000-mark. However, Bitcoin and Ether have now narrowed their downside by 3% and 6% in the last seven days.

However, Bitcoin has dived by nearly 28% in one month, while in a year the drop is over 26%. Bitcoin which dominates the crypto market had touched an all-time high of $68,789.63 in November last year.

Terra USD gave up its peg, while its sister LUNA collapsed to zero limits. Meanwhile, Terra UST continues to witness selling pressure. The coin has plunged by more than 11% and trades around $0.07846. In the last seven days, the coin's drop is more than 48%.

UST lost its peg following the Wormhole hack, which also led to a drastic price crash for LUNA. Currently, Terra LUNA trades at around $0.0001351 up by 1.31%. The coin had last month touched a high of $119.18. However, since the start of May, LUNA has slumped 100%.

What should investors do?

Nischal Shetty, Co-founder and CEO at WazirX said, “The recent incident that took place concerning Luna is cautioning."

"Investors should do their research instead of being driven majorly by the sentiment of their peer group or FOMO," Shetty said.