The cryptocurrency market is currently experiencing a slight pullback after its recent bull run but Terra’s native cryptocurrency Luna seems to be going against the grain and is one of the day’s biggest gainers.
Luna is trading at $13.76 after rallying by 18.34% in the last 24 hours, making it the biggest gainer in the top 50 cryptocurrency list based on market cap. Its impressive gains today have further extended its weekly gains to an impressive 47.54%, affirming its strong bullish momentum, part of which was courtesy of the bullish sentiments in the overall crypto market.
erraLuna’s historic price analysis especially in the last three months reveals that its bearish performance in May was the result of the FUD-induced selloffs in the crypto market. However, its performance in June and July also reveals that the cryptocurrency made some bullish attempts that were also shut down by the bearish resistance in the market. However, its price action in the last two weeks has been heavily bullish.
The cryptocurrency’s performance in the last two weeks was the result of the overall bullishness in the market and this is reflected by the dominating buying volume. However, it seems to be maintaining the rally despite the ongoing market correction. Its rally is so strong that it has continued on its upward trajectory despite being in the overbought zone according to the stochastic RSI indicator. It also managed to recover above its 99-day moving average, which may have provided some confidence to investors.
So far there have not been any major developments on the Terra blockchain that can be described as catalyst events. However, there is one incident that may have encouraged investors to buy and hodl, thus fueling the strong rally. A Twitter user by the name @AriumCrypto noted earlier in the day that an unusual limit sell order was removed from Luna’s order book. It would have to be a substantial order for it to have such a major impact and rightfully so. The tweet revealed that the order was for 24.32 BTC, which is more than $900,000 at the current Bitcoin exchange rate.
The removal of a sell limit order on such a huge trade suggests that the account holder expects Luna to continue rallying. This news may have further provided support to the bulls by encouraging Luna holders to keep hodling. It is also likely that the rally is a result of token burns and demand for Luna in support of the numerous algorithmic stablecoins launched on the Terra blockchain. Note that the coin facilitates the peg of any Terra stablecoin.
An increase in demand for Terra-based stablecoins might continue fueling the demand for Luna. However, other market forces might also come into play, such as a continued crypto rally although it is currently not clear whether that will happen. Demand for other products on the Terra blockchains, such as the Mirror protocol is another major factor that will affect the price of Luna. So far the recent bull run seems to be overcoming the overall market direction and this might continue to be the case if the Terra protocol continues to enjoy strong demand and organic growth as more projects launch on the blockchain.
Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.
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