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?
On deep thinking about the full market movement,it will be the true one.Because the price of Luna was reduced 99.9% from the old value.This give huge impacts to the market.Many people had cash out their entire money from the Luna.Some people had withdrew entire and get the funds out to their bank accounts.It was reasons for the dump.