The cryptocurrency market is currently experiencing a substantial cool down during which the total market cap has so far declined by 4.92% in the last 24 hours but LUNA it seems is going against the current.

LUNA is currently trading at $27.72 after rallying by 8.88% in the last 12 hours. Its gains today have further added to its previous weekly gains and it is currently up by 62% in the last 7 days. It has so far rallied by more than 320% since July 21 when the current crypto bull run began. The ongoing strong rally gave LUNA the momentum it needed to cross above its previous all-time high of $22.4. Its current new ATH which it set earlier today is $28.16.

Source: Binance

LUNA’s ongoing parabolic price action reflects a sudden increase in buying volume, especially in the last three days. However, the strong price gain will likely experience a pullback now that it is overbought at its current level according to the RSI.

Multiple positive announcements made within the last three days have contributed to the robust bull run. Some of the announcements include the reveal that UST supply is at an all-time high, suggesting a significant LUNA burn to mint the additional stablecoins. Terra leverages a vault mechanism that maintains a stablecoin peg through a token burn and minting approach. An increase in demand for UST leads to more LUNA being burnt to generate more UST stablecoins. Unsurprising considering the intensified trading now that the market has turned bullish.

Burning lowers LUNA’s circulating supply, subsequently leading to a higher price tag. A Twitter user under the name @PeterTheTerran noted yesterday that roughly $1.5 million worth of LUNA was recently burnt.

The highly anticipated governance proposal seeking the rollout of the Columbus-5 upgrade to the Terra mainnet is arguably one of the biggest catalysts behind the recent rally. The upgrade will take place three weeks from now and will introduce some essential changes to the Terra blockchain. One of the key highlights of the proposal is that it suggests higher LUNA incentives for those staking UST to supply liquidity on Saber. The proposal was passed and it means stakers will earn more rewards.

The passed proposal will increase the demand for UST from those planning to stake or add to their already existing portfolio on Saber. It will thus contribute to a lower supply for LUNA as more tokens are burnt. LUNA’s ongoing rally is also the result of investors buying the token in anticipation of more value now that the Terra blockchain is launching more projects.

Demand for LUNA has also been high on the Mirror protocol which also uses a token burn and minting mechanism. The Mirror protocol recently announced the launch of Mhood, a mirrored stock of the Robinhood app which will allow traders to access the stock within a DeFi environment.

So far the Terra network has attracted a lot of participation, affirming that it is one of the most popular blockchains targeting growth through DeFi. It recently crossed a major milestone of more than $3 billion worth of total value locked and still growing.