Mirror Protocol (MIR) hits record low as Terra fails to maintain the UST-peg

Key Takeaways:

  • Mirror Protocol (MIR) crashed to all-time low.
  • MIR could face more losses ahead based on bearish technicals.
  • Terra's latest UST troubled might be responsible for Mirror's crash.
Mirror Protocol

YEREVAN (CoinChapter.com) – Mirror Protocol (MIR), a decentralized protocol that allows users to trade tokenized synthetic assets on the Terra blockchain, faced an 18% intraday drop and traded at $0.74 ahead of Tuesday’s New York session. Moreover, the token bottomed out at $0.64 hours earlier, hitting its record low value amid a sell-off across the broader crypto market.

Mirror Protocol (MIR) price action on May 10. Source: CoinMarketCap.com
Mirror Protocol (MIR) price action on May 10. Source: CoinMarketCap.com

In detail, MIR token’s choppy performance throughout the European session resulted in a retracement attempt after hitting the mentioned all-time low. However, it is not yet clear whether MIR bulls can hope for a rebound.

More trouble ahead for Mirror Protocol

The digital asset failed to hold the last time-tested support bar at $1.0 and broke below it on May 8. Moreover, the trading volumes on the daily chart have been declining since early March. Thus, the efforts of Mirror Protocol bulls could prove insufficient against the sell-off wave.

Mirror Protocol (MIR) daily chart. Source: TradingView.com
Mirror Protocol (MIR) daily chart. Source: TradingView.com

Conversely, the token’s relative strength index (RSI; purple graph at the bottom) dropped below the oversold threshold, hinting at a possible price boost. Notably, the trend-based RSI reflects traders’ return expectations from a particular token. Thus, traders might perceive the oscillator drops below the 30-70 range as an opportunity to ‘buy the dip,’ subsequently bolstering the price.

However, Mirror Protocol was not the only protocol to suffer from the latest Terra token crash. As CoinChapter previously reported, Terra’s main stablecoin UST and governance token LUNA shaved billions off their market caps in the previous 24 hours.

Terra responsible for MIR crash?

According to the data from the DeFi-tracking platform DeFiLlama, Terra’s total value locked (TVL) nearly halved in the previous 24 hours, going from $17 billion to $9.2 billion.

Terra blockchain's TVL on May 10. Source: DeFillama.com
Terra blockchain’s TVL on May 10. Source: DeFillama.com

As a result, several leading protocols in the ecosystem suffered the cost, including Mirror Protocol. Its TVL dropped nearly 20%, while lending/borrowing platform Anchor led the pack with a 45% TVL loss.

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