- Terra (LUNA) is one of the biggest movers in the world of crypto.
- LUNA has surged over 25% over the past 24-hours.
- LUNA holds 11th position on CoinMarketCap.
Terra (LUNA) is one of the biggest movers in the world of crypto. Presently, the LUNA has surged over 25% over the past 24-hours, also making Terra one of the biggest gainers of the day, and crypto investors also watching closely. Moreover, investors wonder about analysts’ views on Terra.
LUNA holds 11th position on CoinMarketCap. Currently, the LUNA price is trading at $39.91 with a 24-hour trading volume of $4,977,946,386, at the press time.
The above chart shows the bullish performance of LUNA. If this bullish trend continues the price of LUNA can reach new heights soon. Added to this, the Relative Strength Index indicates LUNA is in an overbought state. This shows the price reversal of LUNA can happen at any time.
In addition, there are many things going around on Terra. More so, Terra undertakes a massive Columbus 5 upgrade. With all, like other digital assets, Terra looks to get better, faster. Furthermore, these upgrades will enable simplified token swapping which is the main use of the ecosystem.
Added to this, the update will also allow for token burning. This makes each LUNA token more valuable. Furthermore, these hard fork upgrades are watched closely by digital asset investors currently. These upgrades have the potential to drive real value in the near future.
Terra price analysis: LUNA rises back to $42 recovering from the flash crash to $38
- Terra price analysis suggests upwards breakout from $44
- The closest support level lies at $41.24
- LUNA faces resistance at the $44.00 mark.
The Terra price analysis shows that LUNA has observed sharp volatility over the last 24 hours as the rejection at $44 caused it to crash to the $38.00 support level. However, the buyers bounced back from the level recovering to the $42.00 mark as LUNA appears to be making another attempt at the $44.00 resistance.
The broader cryptocurrency market has observed a bearish market sentiment over the last 24-hours as most major cryptocurrencies record positive price movements. Major players include ETH and BTC recording a 10.01 and an 8.28 percent decline respectively.
Terra price analysis: Bulls dominate as the price approaches $44
Across the technical indicators, the MACD is currently bullish as expressed in the green color of the histogram. However, the indicator shows low momentum as the histogram is small at press time. Furthermore, the indicator has observed four crossovers across the last four days suggesting a lack of a clear direction for the Terra price analysis.
The EMAs are currently trading close to the mean position as Terra records little net movement across November. At press time, the 26-EMA is moving horizontally reflecting the oscillating price action over the past 2 days. On the other hand, the 12-EMA has reacted to the recent price movements reflecting the sudden crash and recovery and currently moves with an upwards slope.
The RSI is currently neutral and trades close to the mean at 52.98 index marks suggesting a slight bullish bias to the price action. At press time, the indicator is moving upwards suggesting an increasing buying activity in the markets. The indicator has remained neutral for a long time suggesting that LUNA has observed little volatility across the mid-term charts.
The Bollinger Bands are currently wide but show and continue to remain wide suggesting a period of high volatility for the Terra price action across the 4-hour price charts. Previously, the bands’ mean line presented a resistance level to the buyers at $41.00 but as LUNA climbed above the mark, the level now provides a support level to the bulls for further upward movements.
Technical analysis for LUNA/USDT
Overall, the 4-hour Terra price analysis issues a sell signal with nine of the 26 major technical indicators showing support to the bears. On the other hand, eight of the indicators support the bulls suggesting that there is significant buying activity occurring in the markets. Meanwhile, the remaining nine indicators sit on the fence and issue no signals at the time of writing.
The 24-hour Terra price analysis shares this sentiment and issues a sell signal with 10 indicators suggesting an upwards price movement against six indicators suggesting a downwards price movement. The analysis reaffirms the bearish dominance in the markets, the mid-term charts but suggests that the trend might be changing across the short-term as more technicals turn bullish.
What to expect from the Terra price analysis?
The Terra price analysis shows that LUNA is currently stuck on a fragile balance of momentum towards either side as the price action observes sharp movement between $44 and the $38.00 mark over the last three days with no breakout in either direction. However, the high volatility shows that the buyers are active and not speculating suggesting that a rally may be initiated at any time.
Currently, traders should expect the Terra price analysis to move upwards to challenge the $44.00 mark as the buyers continue to gather momentum. This suggestion is supported by the short-term technical indicators and while the mid-term technical analyses show support to the bears, the technicals are slowly starting to lean towards the bulls increasing the possibility of an upwards breakout to the $45.00 mark.
Terra price analysis: LUNA set to launch up to $48 after price reaches 20-day EMA
- Terra price reached as high as $45.44 after consolidating on yesterday’s uptrend
- Price could be set to reach as high as $48 in the current run
- Trading volume also rose up 2 percent on the day
Terra price analysis for the day shows positive signs for the token, as it looks set to revisit heights set earlier in the month. Price rose more than 3.5 percent on the day, recording a high of $45.44 to reverse the downtrend that had been in play since November 14. Price dipped as low as $38.91 just 2 days ago, before trending up past the crucial 20-day exponential moving average (EMA) at $45.09, today. In the current trend, LUNA is tipped to go past the current resistance point at $48.12 along with a recovering larger cryptocurrency market.
Bitcoin rose more than 3 percent to sit just shy of the crucial $60,000 mark, whereas Ethereum also rose 3 percent up to $4,390. Major Altcoins also showed positive signs, led by Litecoin‘s 6 percent increment. Ripple and Dogecoin upped 1 percent each, whereas Polkadot and Solana rose 2 and 4 percent, respectively on the day’s trade.
LUNA/USD 24-hour chart: Heads and Shoulders pattern appears
On the 24-hour chart for Terra price analysis, formation of a classic Heads and Shoulders pattern can be seen, suggesting of an ongoing battle between buyers and sellers to manoeuvre price. After touching past the crucial EMAs at $45.23, price went down as low as $42.69. This can also be verified with the Moving Average Convergence Divergence (MACD) curve that currently sits well below its neutral zone. However, it carries the potential to increase from the 0.00 mark, as is suggested by the Relative Strength Index (RSI) value of 46.26 which indicates that Terra price is in need of buyer impetus at current trend.
LUNA/USD 4-hour chart: RSI looks to be pushing up with crucial trading sessions ahead
The 4-hour price action further compliments the 24-hour chart with a fully poised scenario between buyers and sellers for LUNA. Price looks to be pushing up past the 20-day EMA, with RSI value sitting just shy of 50 to indicate slight levels of valuation in the market for the token. A positive note can also be drawn from the Bollinger Bands’ trend, where price sits in-between the top and middle curves to show a potential upturn.
Terra price analysis: Conclusion
Technical indicators confirm that LUNA currently sits within a crucial buyer-seller battle. If price can sustain the current spell and move along the cryptocurrency market then Terra price may see the highs set earlier in the month, with the $48 resistance point the first target. However, if price ships from the current stage to go below the EMA, then LUNA may be set for a distinct period downwards with the $38.91 support floor an eventual destination.
Can LUNA ‘burn’ its way to greater highs in the long term
LUNA was the talk of the town in early November after it managed to breach the $50-mark and hit a new ATH. However, just like other altcoins, even LUNA couldn’t shield itself from the broader bearish sentiment. Since 14 November, the crypto has shed more than 20% of its value. At the time of writing, it was trading within the $40-bracket.
The ‘deflationary’ tag
Keeping aside its of-late performance, it should be borne in mind that LUNA’s macro-uptrend still remains intact. In fact, post-Terra’s Columbus-5 upgrade, LUNA has seen smooth sailing.
TerraUSD, Terra’s native stablecoin, is backed by LUNA. So, in order to increase the supply of TerraUSD, LUNA tokens need to be burned. Conversely, more LUNA is minted when UST’s demand dips.
Here, it is to be noted that the burning strategy, isn’t new. Ethereum has had luck destroying its own coins post the EIP-1559 upgrade. In fact, after doing so, ETH too hit new highs before corrections set in.
Now, while the aforementioned mechanism is fundamentally great for cryptos, it’s worth remembering that LUNA wouldn’t become deflationary straight off the bat.
1/ The on-chain votes for proposals 133 and 134 to burn the 88.675 million Pre-Col-5 $LUNA in the Community Pool (~$4.5 billion), swapping for $UST using the on-chain swap, and reducing the oracle_rewards_pool distribution window from 3 to 2 years have now passed!— Terra (UST) 🌍 Powered by LUNA 🌕 (@terra_money) November 10, 2021
The supply of LUNA is further set to decrease with time. But, that’s only half of the equation. Only if the demand parallelly increases would the whole ‘scarce asset’ narrative make sense.
Can decreasing supply spark LT demand?
Theoretically, yes. But, other key factors like the inflation rate and stock to flow ratio need to be considered before coming to a conclusion.
Consider this – In the month of September, LUNA’s S2F was seen hovering around the 18-mark. In October, the same inched up to 20. Interestingly, the same projected a value of 24, at the time of analysis. The improving state of this metric clearly highlights the shielded future of this altcoin.
The stock-to-flow model essentially quantifies scarcity by considering parameters like total supply and annual production. The higher the value, the better, and vice versa.
Similarly, the inflation rate has also slipped from 5.52% to 4.1% over the same timeframe. What this means is that LUNA’s long-term retention value has only been getting stronger with time.
Further, as per Messari’s data, in ten years’ time, the projected supply is set to remain 996 million while the issuance percentage would also revolve around 96%. If these projections indeed materialize, the token would be lauded for its deflationary nature.
Now, as per data, LUNA’s staking yields currently revolve around 5%, which is decent enough to attract investors to buy more coins. Thus, the potential increase in demand is set to pull up the alt’s LT price even further.
Another set of positives
Terra network’s state of development activity has been pretty impressive, of late. The same was seen revolving around its yearly high, at the time of writing. This essentially means that developers are constantly working towards keeping the project relevant. Not only for sustenance, but for competition too.
Thus, keeping in mind all the aforementioned factors, especially the whole burning mechanism, it wouldn’t be wrong to claim that LUNA’s future prospects seem to be quite bright.
It’s just a matter of time that the alt commands even more dominance in the market and inches even higher on the rankings and price chart.