We know algorithmic stablecoins are new and risky. UST is backed by Luna, and the foundation behind Luna bought so much Bitcoin I believe they're now amongst the top 10 holders.
If UST loses its peg against the dollar and Luna isn't enough to bring it back up, the foundation will have to sell some of its BTC to keep the peg, which applies sell pressure on BTC and brings it down along with the whole crypto market.
Is this what's happening now already?
It is a combination of factors, to begin with the market was bearish and the price has gone down for some time, then luna has crashed more than 99% in a single week, since it was a popular coin and many people were losing a lot of money then I think it is to be expected that this had a tremendous effect on the market, as this gave more ammunition to those that argue that this market is just a big scam, so it is easy to see how this has scared away a great deal of investors that were here only for the money and nothing more.