Crypto Weekly: Let’s call it Terra 2.0 and try again Crypto Weekly: Let’s call it Terra 2.0 and try again Crypto Weekly: Let’s call it Terra 2.0 and try again

Crypto Weekly: Let’s call it Terra 2.0 and try again

Mads Eberhardt

Cryptocurrency Analyst

Summary:  From being intensively correlated to the equity market this year, the crypto market deviated significantly last week when it tumbled. This might indicate that investors are now more willing to take on risk in the equity market than in crypto. Terra, the crypto that blew up earlier this month launches a version 2.0 but is somewhat ignoring that it has caused a meltdown worth billions.

Highly correlated to stocks, then suddenly not

So far this year, the crypto market has been unusually correlated to the equity market, particularly to technology stocks, during this time of risk-off sentiment. Yet, the markets went opposite directions last week. While the leading NASDAQ index was up around 6.7% last week, Bitcoin and Ethereum had tumbled by around 5% and 14.7%, respectively, at close on Friday. Bitcoin recovered most of its losses over the weekend but is still far from surging 6.7% as NASDAQ. At the moment, Ethereum is down by 8.3% since the beginning of last week. If the lack of correlation continues, it can raise more unrest in the crypto market, since it may indicate that investors are increasingly more willing to take on risk in the equity market than in crypto, possibly extending the tumbling of crypto. Thus, we encourage traders to watch the crypto market’s correlation with equities ahead. To follow in the footsteps of NASDAQ, Bitcoin needs to break its resistance at 31,500 (BTCUSD) from its current price of 30,600. If it breaks this resistance, a surge to 36,000 is possible. However, if it breaks its support at 28,500, we can see Bitcoin as low as 20,000.
Source: TradingView

Ethereum traded the lowest against Bitcoin this weekend since October last year at 0.06 ETHBTC. So even though the highly anticipated Ethereum merge is coming up, it seems that Bitcoin is still perceived as the safest crypto asset, which investors are more unwilling to liquidate in times of risk-off and increased uncertainties compared to Ethereum and other cryptocurrencies. Based on this matter, it is likely to see Ethereum and other cryptocurrencies percentage-wise tumbling more if Bitcoin breaks support at 28,500.

Terra 2.0 launches

One of the larger cryptocurrencies Terra blew up earlier this month by entering a death spiral, wiping out a combined $58bn market capitalization – $40bn for LUNA and $18bn for its stablecoin UST - at their respective highest. Fast forward not only one month, and Terra 2.0 launched this weekend. The idea behind Terra 2.0 is to restore its ecosystem of various protocols, this time without its native stablecoin UST. Terra 2.0 was distributed to holders of Terra. At the time of writing, Terra 2.0 has a market capitalization of $1.2bn.

At some point, one should acknowledge one’s defeat and let a project die out. Terra should have been such a project. In our view, Terra has already caused enough harm to individuals and the crypto market as a whole. It genuinely seems the people behind Terra believe that they can always give it a new shot, in case their first effort did not turn out well, thus neglecting that their flawed design has already caused a meltdown worth billions. The case of Terra does not put the crypto market in a good light nor does the Terra 2.0 narrative of “
let us just try again”. The crypto market should focus on projects that create value to become something else than a speculative asset class.

Bitcoin/USD - Source: Saxo Group
Ethereum/USD - Source: Saxo Group

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.