Peg broke due to UST having a huge bank run, with people selling the UST for other stablecoins (hence pushing down the price of UST). Now for the peg to be restored to $1, Luna Foundation Guard had to liquidate a crap ton of bitcoin on their reserves just to push UST back to $1, further pushing down the downward pressure on BTC.
And it is still far from 1 $, it is now 0.90
I believe those kinds of events are healthy for the ecosystem. It exposed to everyone that some parts of the DeFi ecosystem are not really safe.
I hope similar projects will be wiped out soon. Anyone holding Luna after this tragedy should be really rethinking the fundamentals of such investment.
In the middle term, bitcoin won't be affected by this event.
DeFi isn't perfect so far, and needs to be developed up to that point. Especially in the existing security, they are far from safe like what happened with UST, everyone is afraid of the stable existence of the coin because of that. I think they should perfect their coin stable program ecosystem first before starting DeFi, doing that at the same time makes them unable to maintain one of them so they have to suffer losses like this.