Terra back from the dead? LUNA price rises 300% in September

September 11, 2022 Coin Telegraph

Altcoin

The incredible LUNA rally took place amid a flurry of positive and negative events while technicals suggest a correction is coming.

Terra has become a controversial blockchain project after the collapse of its native token LUNA and stablecoin TerraUSD (UST) in May. But its recent gains are hard to ignore for cryptocurrency traders.

LUNA rising from the dead?

After crashing to nearly zero in May, LUNA is now trading for around $6, a whopping 17,559,000% price rally in less than four months when measured from its lowest level.

Meanwhile, LUNA's performance in September is particularly interesting, given it has rallied by more than 300% month-to-date after a long period of sideways consolidation.

*LUNA/USDT daily price chart. Source: TradingView*

Terra ecosystem in September

It is vital to note that LUNA also trades with the ticker LUNA2 across multiple exchanges.

In detail, Terraform Labs, the firm behind the Terra project, divided the old chain into Terra Classic (LUNC) and Terra LUNA 2.0 (LUNA/LUNA2).

Terra Classic is the original version of the Terra blockchain, while Terra LUNA 2.0 was created as a part of a regeneration strategy by Terraform Labs founder Do Kwon. In doing so, Kwon and his team periodically airdrop the LUNA2 tokens to users affected by Terra's collapse.

LUNA/LUNA2 started pumping on Sep. 9, the day on which many things happened inside the Terra ecosystem.

First, Terra Classic (LUNC) passed governance proposals to add a 1.2% tax on all its on-chain transactions on the day. In other words, the proposals will permanently remove 1.2% of the LUNC supply from each on-chain transaction, as Cointelegraph covered here.

Terra Luna Classic (#LUNC) skyrockets >37,000% since its bottom after the Terra collapse

This comes after a proposal to implement a 1.2% token burn tax on all transactions that will enable $LUNC to become a deflationary cryptocurrency.#LUNC ✨ #HaileyLUNC ✨ $LUNC ✨ pic.twitter.com/oIxI7tqVkW
— Hailey LUNC ✳️ (@TheMoonHailey) September 7, 2022

Second, a self-proclaimed Terra whistleblower, FatMan, reported a suspicious transaction worth 435,000 LUNA2 tokens to Binance, alleging that the sender is TerraForm Labs.

“Was eating lunch [and] saw LUNA2 pump. Checked the TFL Dawn wallet. Sure enough, after months of farming rewards with the airdrop they claim they never received, they sent all 435K available LUNA 2 to Binance just days ago. That’s just one address."

.@clayop tallied up the numbers - TFL sent a total of $3.9 billion USD (in UST) to exchanges including Binance and KuCoin.

Let the enormity of that figure sink in, and consider how many people's savings that is added up. Crypto's biggest fraud.

No explanation from @stablekwon https://t.co/qc2kCFPMHW
— FatMan (@FatManTerra) September 9, 2022

However, Do Kwon dismissed the allegations.

The Sep. 9 pump also occurred a week after Terra passed the proposal to conduct its second airdrop of over 19 million LUNA tokens until Oct. 4.

LUNA price technicals lean bearish

From a technical perspective, LUNA's price risks undergoing a massive correction in the coming days.

Firstly, on the four-hour chart, the token's relative strength index (RSI) has jumped above 70, which is considered overbought territory where a correction becomes more likely. Secondly, the price has been forming a rising wedge, a bearish reversal pattern, since Sep. 9.

*LUNA/USDT daily price chart featuring rising wedge breakdown setup. Source: TradingView*

Notably, a rising wedge forms when the price trends higher inside an ascending range whose upper and lower trendlines converge toward one another. It resolves after the price breaks below the lower trendline together with a rise in trading volume.

As of Sep. 11, LUNA was testing its wedge's lower trendline for a potential breakdown move. In this case, the price will risk falling by as much as the wedge's maximum height.

In other words, LUNA could drop to $4.5, down 30% from today's price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Do Kwon, Terraform Labs Face Class-Action Lawsuit for Allegedly Selling Unregistered Securities

July 30, 2022 Bitcoin.com

Do Kwon Accused of Cashing out $2.7B Before UST Collapse, Terra Founder Says Allegations Are False

June 13, 2022 Bitcoin.com

LUNA 2.0 Token Loses 56% Since Last Week, Whistleblower Accuses Terraform Labs of Owning Shadow Wallets

June 6, 2022 Bitcoin.com

Bitcoin stays under $30K as LUNA gains 600% during ‘insane volatility’

May 14, 2022 Coin Telegraph

Bitcoin

Traders' risk appetite seems untainted as speculation around LUNA runs wild once again.

Bitcoin (BTC) failed to reclaim $30,000 into May 14 as traders looked forward to a relatively stable weekend.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Bitfinex longs gather strength

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it lingered below the $30,000 mark, now rapidly becoming resistance.

The pair had reached just shy of $31,000 before retracing, while the end of the traditional market trading week had been accompanied by fresh warnings of a new macro low still to come.

#Bitcoin - Looks like we might get the inverse H & S before going into the weekend. Hoping to see this 4h candle hold and see it push up. Then I'll move stops in profit and let it ride during the weekend. 2% risk, 2% stop loss. pic.twitter.com/lxRuk3M43G
— IncomeSharks (@IncomeSharks) May 14, 2022

Not everyone stayed on the sidelines as the dust settled. On major exchange Bitfinex, long leverage continued expanding, having already hit all-time highs.

"Another day has passed and the Bitfinexors are still loading up as if someone has a gun to their head," commentator Johal Miles reacted alongside a chart showing the trend.

Terra plans spark frenetic LUNA moves

Attention nonetheless focused more on Blockchain protocol Terra’s LUNA token on the day.

After losing practically all of its value in a week, LUNA saw a rebound which was tiny compared to its all-time highs above $100 but hugely lucrative for short-term traders.

Despite its supply ballooning to 6.9 trillion tokens, LUNA subsequently appreciated 100 times from its floor price on news that creator Terra had plans to “revive” its ecosystem.

Faced with the price action, many were in disbelief.

(only need a few more 100x's to get back to $1)
— Luke Martin (@VentureCoinist) May 14, 2022

“The volatility on $LUNA is absolutely insane,” Cointelegraph contributor Michaël van de Poppe commented, adding that it was a “great weekend to scalp trade a little.”

*LUNA/USD 5-minute candle chart (Bitfinex). Source: TradingView*

With trading already halted on major exchange Binance, LUNA/USD nonetheless remained a highly risky portfolio addition, with prices varying wildly minute to minute and between trading venues.

Those buying in on the majority of occasions through the week conversely faced near total losses on their positions.

I really don’t think Luna is a buy and hold right now, it’s a risky in and out play. I have no clue what’s going to happen with it.

Be careful if you are trying to trade it!
— Altcoin Gordon (@AltcoinGordon) May 14, 2022

At the time of writing, LUNA/USD traded at $0.027 on Bitfinex, having risen to $0.034 earlier in the day — 593% above the week's all-time lows of $0.0049.

Bitcoin falls below $27K to December 2020 lows as Tether stablecoin peg slips under 99 cents

May 12, 2022 Coin Telegraph

Bitcoin

USDT is the latest stablecoin causing nervousness as Tether insists that operations are continuing as normal.

Bitcoin (BTC) fell out of its long-term trading range on May 12 as ongoing sell pressure reduced markets to 2020 levels.

Tether wobbles as UST stays under $0.60

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it exited the range in which it had traded since the start of 2021.

At the time of writing, the pair circled $26,700 on Bitstamp, marking its lowest since Dec 28, 2020.

The weakness came as fallout from the Terra stablecoin meltdown continued to ricochet around crypto and beyond, with rumors claiming that even professional funds were experiencing solvency issues due to losses on LUNA and UST.

"People are still processing this but this is the Lehman moment for crypto"

Hearing about a lot of funds possibly insolvent from Luna meltdown
— Frank Chaparro (@fintechfrank) May 12, 2022

LUNA, Tether's in-house token, had all but capitulated in value at the time of writing, trading at around $0.22. At the start of May, LUNA/USD traded at $80.

*LUNA/USD 1-day candle chart (Binance). Source: TradingView*

UST, currently the focus of Terra executives committed to restoring its U.S. dollar peg, was at around $0.60, still far from $1 but more than double the week's record lows.

*UST/USD 1-hour candle chart (Coinbase). Source: TradingView*

Nevertheless, the strain was increasingly visible across crypto, as largest stablecoin Tether (USDT) itself began to deliver worrying signs that it was copying UST's downfall.

At the time of writing, USDT/USD was under $0.99 on major exchanges.

Commenting on system stability, Tether chief technology officer Paolo Ardoino said that withdrawals of USDT were proceeding as normal.

">300M redeemed in last 24h without a sweat drop," part of a tweet read.

*USDT/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Data from on-chain analytics firm CryptoQuant added that record outflows of stablecoins had been witnessed on major exchanges.

*Exchange stablecoin outflows chart. Source: CryptoQuant*

$1.22 billion liquidated in 24 hours

On the topic of losing the macro range low created in January 2021, analysts were still willing to see current levels as a potential opportunity.

"Whatever you lose in a macro downtrend, you'll gain multiples back in a macro uptrend. All you have to do is pay attention to the markets when they are ultra bearish," popular trader Rekt Capital argued.

A previous tweet on May 11 highlighted the macro range.

If #BTC loses this green area as support...

That will be the confirmation that $BTC will enter a multi-month downtrend#Crypto #Bitcoin pic.twitter.com/ReIa6D4yw3
— Rekt Capital (@rektcapital) May 11, 2022

The extent of the losses was reflected in market liquidations. Data from on-chain monitoring resource Coinglass showed that for Bitcoin and altcoins combined, these topped $1.2 billion in the 24 hours to the time of writing.

Bitcoin plumbs April lows as US dollar strength hits highest since May 2020

April 8, 2022 Coin Telegraph

Bitcoin

USD reaches 23-month highs while the Russian ruble joins in on the surprise gains.

Bitcoin (BTC) neared new price lows for April on April 8's Wall Street open amid a fresh surge in the U.S. dollar.

$43,000 hangs in the balance

Data from Cointelegraph Markets Pro and TradingView captured another day of gloom for BTC bulls as the largest cryptocurrency slipped back under $43,000.

In a classic move, BTC/USD reacted unfavorably to a resurgent dollar, with the U.S. dollar currency index (DXY) returning above 100 for the first time since May 2020.

Coming on the back of tightening measures from the Federal Reserve, the greenback also spelled a headache for stocks, which opened down on the day.

*U.S. dollar currency index (DXY) 1-week candle chart. Source: TradingView*

While some considered the DXY event a temporary show of strength, its impact on crypto markets was clear to see, exacerbating an already wavering recovery from months of downside.

Huge risk-off shift in TradFi in the last few hours... Dollar index >100 for the first time since May 2020

US equities puking in pre-hours... crypto down, but not as much as it should be all things considered
— tedtalksmacro (@tedtalksmacro) April 8, 2022

"Now the bullish chart is getting confirmation, which tells me we are closer to the end of this bull leg on DXY," popular analyst Aksel Kibar told Twitter followers as a part of his comments.

For Cointelegraph contributor Michaël van de Poppe, the area between spot price and $40,000 was crucial to hold to preserve Bitcoin's uptrend.

#Bitcoin approaching crucial level to test if it wants to continue moving upwards, to potentially $56K. pic.twitter.com/pip6E4qoWE
— Michaël van de Poppe (@CryptoMichNL) April 8, 2022

Beyond the dollar, Bitcoin was also struggling against another resurgent currency just weeks after hitting all-time highs against it.

The Russian ruble, fresh off record lows against all major world currencies, returned with a vengeance over the week, on April 8 beating its 2022 best in USD terms.

BTC/RUB traded at 3.46 million at the time of writing, its lowest since Feb. 27 and 34% below its record.

*BTC/RUB 1-day candle chart (Binance). Source: TradingView*

LUNA brings up the rear on major altcoins

On altcoins, Ether (ETH) was a rare island of calm on the day as many of the top ten cryptocurrencies by market cap showed signs of strain.

ETH/USD traded flat at $3,220, limiting weekly losses after some impressive levels were reclaimed.

A notable weak performer on the daily chart was Terra (LUNA), down 6% at the time of writing, despite the buzz behind its issuer's stablecoin backing plans.

Near Protocol (NEAR), also planning to release an algorithmic stablecoin, saw considerable upside over the past 24 hours after raising $350 million.

Terra (LUNA) at risk of 50% drop if bearish head and shoulders pattern plays out

January 28, 2022 Coin Telegraph

Bitcoin

LUNA price is at risk of further downside, but analysts point to a possible rebound as the altcoin tests a reliable, multi-month moving average as support.

Terra (LUNA) may fall to nearly $25 per token in the coming weeks as a head-and-shoulders (H&S) setup develops, indicating a 50% price drop, according to technical analysis shared by CRYPTOPIKK.

H&S patterns appear when the price forms three peaks in a row, with the middle peak (called the "head") higher than the other two (left and right shoulders). All three peaks come to a top at a common price floor called the "neckline."

Traders typically look to open a short position when the price breaks below the H&S neckline. However, some employ a "two-day" rule where they wait for the second breakout confirmation when the price retests the neckline from the downside as resistance, before entering a short position.

Meanwhile, the ideal short target for traders comes out to be at length equal to the maximum distance between the head and the neckline. In LUNA's case, the price has now been heading toward the same H&S short target, currently near $25, as shown in the chart below.

*LUNA/USD daily price chart. Source: TradingView*

Meanwhile, the volume recorded during the H&S breakout appears consistent, underscoring that the ongoing downtrend has enough bearish sentiment. This further raises risks of further declines in the Terra market.

LUNA's daily momentum indicators, primarily relative strength index (RSI) and money flow index (MFI), have both entered their respective oversold regions, which some might consider to be a buy signal. CRYPTOPIKK recognized that they could prompt the LUNA price to rebound but said "the trend still seems [to be] heading down."

Where's the bottom?

The bearish outlook appears as the LUNA trades under the pressure of strong macroeconomic catalysts, mainly the U.S. Federal Reserve's decision to unwind its $120 billion a month asset purchasing program entirely by March, followed by the first interest rate hike from its current near-zero levels.

Tightening monetary policies had started hurting assets that had been bullish when these policies were loose. That includes some sections of the U.S. stock market and Bitcoin (BTC). So, LUNA seems to have been tailing Bitcoin's losses against the ongoing market uncertainty, especially as it sits atop a year-over-year profit of 3,200% versus BTC's 11.50% gains.

*LUNA/USD weekly price chart. Source: TradingView*

In its short history as a financial asset, LUNA's downtrends have typically come to exhaustion as it tests its 50-week simple moving average (50-week SMA; the blue wave in the chart below) as support. That price floor was near $30 at the press time.

Meanwhile, on the daily timeframe chart, LUNA has been testing its 200-day exponential moving average (200-day EMA) for a potential rebound. Should it happen, LUNA's next upside target appears to be near $75, as shown in the chart above.

Conversely, a decisive move below the 200-day EMA wave may trigger the H&S setup toward $25.

Terra becomes top-10 crypto: Classic ‘bull pennant’ setup paint $100 LUNA price target

December 9, 2021 Coin Telegraph

<div>Terra becomes top-10 crypto: Classic 'bull pennant' setup paint 0 LUNA price target</div>

Bitcoin

Chiron's $50-million fundraiser to back Terra-backed projects has boosted traders' appetite for LUNA.

Terra (LUNA) faces the prospects of hitting $100 in the coming weeks as it paints a classic bull pennant structure.

In detail, bull pennants appear as the price trends inside a triangle pattern after a strong move upside. Many analysts see it as a sign of bullish continuation, i.e., they think the instrument would eventually break above the triangle's upper trendline to resume its price rally higher.

Additionally, the profit target of a bull pennant structure typically comes to be the length equal to the size of the previous price rally, called flagpole, when measured from the breakout point. As it appears, LUNA has been forming a similar pattern on its lower-timeframe chart.

*LUNA/USDT four-hour chart featuring Bull Pennant setup. Source: TradingView*

Considering the breakout happens at the point where the bull pennant trendlines converge — the apex — the ideal profit target comes out to be over $22, the flagpole height. That puts LUNA on the road to almost $100.

Supportive bullish catalysts

The bullish technical setup in the Terra market appeared as LUNA rallied nearly 65% in less than three weeks to become the tenth-largest cryptocurrency by market capitalization.

The digital asset jumped past Dogecoin (DOGE) and Avalanche (AVAX) to value over $28.60 billion, almost 1.18% of the current total cryptocurrency market valuation of $2.30 trillion. Meanwhile, LUNA's token price climbed from $43.50 to over $77 on Dec. 5, a new all-time high.

*LUNA circulating market capitalization. Source: Messari*

Traders took cues from Chiron Partners, a Hong Kong-based venture capitalist firm, that announced Dec. 8 that it had raised $50 million for a dedicated fund, dubbed Chiron Terra Fund I, to build decentralized finance (DeFi) and metaverse-linked nonfungible token (NFT) projects atop the Terra blockchain.

Jake Cormack, chief operating officer at Chiron Partners, credited Terra's growth potential behind their decision to choose them as their official public ledger, particularly after the blockchain's recent Columbus-5 upgrade , which promises to enable higher scalability and greater cross-chain interoperability.

Deflation FOMO

In detail, the Terra ecosystem consists of a family of stablecoins pegged to a growing list of fiat currencies and a mining token, LUNA. LUNA serves as a governance token, volatility absorption tool, and rewards catcher through "seigniorage" and transaction volumes.

The volatility absorption feature, in particular, proves to be the most bullish case for LUNA. Notably, the Terra ecosystem maintains its stablecoins fiat-peg by burning LUNA tokens. In other words, if the price of Terra's native stablecoin TerraUSD (UST) goes above $1, the protocol burns LUNA to mint more UST, thus bringing its value back to $1.

Conversely, if the UST value goes below $1, the protocol swaps the stablecoin for LUNA to prop up its prices. With the Columbus-5 upgrade and Chiron's $50-million fund promising to bring more projects to the Terra ecosystem, anticipations of more deflationary pressure on LUNA have been rising.

$LUNA price hit a new high shortly after Terra’s Columbus-5 upgrade increased deflationary pressure on the token and integrated Terra with the Cosmos $ATOM ecosystem. https://t.co/vYimuTqo5r pic.twitter.com/59xJdZ2FiB
— Cointelegraph Markets (@CointelegraphMT) October 6, 2021

As Cointelegraph reported, UST stablecoin adoption is growing with its net supply hitting a new record high of $8.221 billion on Dec. 8. On the other hand, according to TerraAnalytics, the Terra protocol has burned more than 104 million LUNA tokens ever since the Columbus-5 upgrade went live at the end of September.

Talis's $2.3M NFT marketplace

Bullish cues for LUNA before the Chiron announcement also came in the form of Talis. The startup raised $2.3 million in funding led by ParaFi Capital and Arrington Capital to build an NFT marketplace on the Terra blockchain.

*LUNA/USDT versus BTC/USD daily price chart. Source: TradingView*

Two days after the announcement, LUNA rose nearly 13% to reach its new all-time high despite a major correction in Bitcoin (BTC), Ether (ETH), and most other cryptocurrencies.

LUNA Price