By Is Terra Classic (LUNA) back on the rising tide?
Is Terra Classic (LUNA) back on the rising tide? TabStocks IN-DETPH September 2022 analytical Article on LUNA as an investing opportunity.
Coin Ticker
LUNA-USD
Name and Trading Exchange Platform
Terra Classic – Binance
– BTCEX
Investing Sector
Luna is an algorithmic stablecoin on the Terra network. Terra is a blockchain whose primary role is to support a network of algorithmic stablecoins. Terra USD is the most popular of these coins.
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Terra’s Achilles heel was brought to light in May this year when it broke its peg of 1:1 with the US dollar.
This led to the dramatic collapse, that saw at least $45B of market value eroded. Its infamous founder and CEO Do Kwon has come under fire and is battling legal implications.
The chain has emerged anew after a forking process that gave birth to two new tokens, Terra Classic and Luna 2.0.
Recent Most Important News on LUNA
The token received a fair share of critics who were bent on the huge collapse and urging people to do away with it altogether.
The attacks have been fierce, and authorities have desperately embarked on a witch hunt.
As bad luck would have it, founder Do Kwon was the main victim of this, with an arrest warrant issued against him in South Korea.
He is technically considered a ‘fugitive’ at the moment, owing to claims that he is fleeing confrontation by prosecutors.
This news adversely affected the trading price of the coin, falling by as much as 21% in a single day, over the past week.
It’s a shame considering that the token was just rising from the ashes and had displayed a phenomenal uptrend.
The corrective measure was being incorporated to improve the network, with a huge number of the token getting burnt in the past few months.
Despite the lurking uncertainty, Luna proved to be resilient coming back up steadily. It saw a record surge of about 300% on 9th September, hitting a high of $7.65.
The surge has been witnessed throughout the Crypto industry, with Luna among the top five gainers alongside ETH, Stellar, and others.
Some have expressed enthusiasm believing that the winter is over, and the good times will roll once again.
Luna is in a catch-22, grappling with legal and macroeconomic pressures whilst rejuvenating.
Current Position of LUNA
Luna has had a rocky ride since the collapse in May. Terraform labs took contingency measures to remedy the situation including forking and burning.
Both tokens have sustained an uptrend with Luna hovering around the $2 mark and LUNC still slightly above zero.
Terraform labs has been working closely with the mega crypto exchange Binance.
The latter has supported the rapid burning mechanism and made it clear that adding off-chain 1.2% LUNC burns to their exchange is still a possibility.
Drastic changes have been made in the operations of Terra’s network.
Luna’s developer team has been forced to migrate to other its new relaunched version and other blockchains such as Polygon and cosmos.
Widespread panic still revolves around the token, with skepticism arising from past events.
Luna has now morphed into a speculative token AKA meme coin. They are now in the process of rebuilding, and this could work out great if successful.
A similar case was seen in Shibu Inu when it adopted massive burning mechanisms which in turn led the token to soar to unexpected heights.
Luna’s case is more severe and will require a great deal of patience to get back on its feet. Legal action is still ongoing and Do Kwon and five other Terra employees are on the radar.
Interpol has got involved and a ‘red notice’ has been signaled for the wanted executives.
The location of the CEO is still unknown, but he has however assured the Luna community that the matter will be addressed.
A Terra spokesperson via Twitter stated and I quote:
We are in the process of defending ourselves in multiple jurisdictions –we have held ourselves to an extremely high bar on integrity and look forward to clarifying the truth over the next few months.
The burning mechanism is ongoing, and the community is excited about it.
Implementing the burn will mean that a huge amount of circulating supply is erased, resulting in a price surge.
Experts have analyzed the recent price action and believe the measures taken could result in huge gains in the future.
LUNA has massive upside potential when compared to its pre-collapse position. The burns will most likely have an effect but will have to be carried out as effectively as possible.
Kraken, the US-based crypto exchange has been ardent in supporting the airdrop of Luna together with the burns.
The has announced that they will be burning deposits and withdrawals of UST and LUNA.
Other exchanges have followed suit, but whether this is for the common good or simply personal interests is still unknown.
Debates have also arisen about re-pegging UST back to Luna. This will eliminate auto minting will, which caused the cataclysmic crash, but more burns are a pre-requisite.
LUNA Price Chart
LUNA Price Chart
The coin is now trading at $2.64 at the time of this writing. It is down by (-2%) in the last 24 hours.
It has remained on a fairly constant trend after the crash, until recently when a huge rally took place rising to the north of $6.
Its counterpart LUNC is trading at 0.28875 and has been more or less on the same trajectory. Speculation has it that it could soon reach $1.
The coin is extremely volatile, even for a volatile asset, with the market chaos, that has triggered mass selling.
It has remained pretty resilient compared to the crypto giants like ETH and BTC.
It is still in bearish mode but if it breaks the current resistance levels, this could be an indicator that the bulls are back.
Sentiment on LUNA
Perspectives on Terra are all in black and white, with thin grey area. Many believe it’s either a boom or doom for the token
A crypto whale who foresaw the catastrophic fall has warned the situation is still pretty grim for Luna.
The was a fundamental flaw in algorithmic stable-coins having no underlying asset to back them, the exposure will help curb another storm like this again.
In the long run, however, those championing Luna see a prospect of a new emergence from the ground up. One commentary puts it quite well:
Buying into Luna is like planting a fruit tree, need to wait a few seasons before the fruit comes.
Wild price action is anticipated but only long hoarders will reap fruitful results.
Pros of LUNA based on Investors Outlook:
- Decentralized network – The developer community is very vast and spread across different platforms, thus it is not pegged to a central figure, like its founder for instance, and will continue regardless.
- Down-trodden price – At this point, the coin is beaten down and has not fully recovered from the fall. It is a far cry from its peaks, thus it is a splendid opportunity to be greedy when others are fearful.
- Corrective mechanism – In addition, to be burning, forking, and on-chain tax are other measures being taken to stabilize the token. A possible moon-shot is expected if it is all restored.
- Increased Trading action – The burning mechanism has attracted a pool of buyers who see a chance for growth. This includes crypto whales and big exchanges.
Cons of LUNA based on Investors Outlook:
- Time demanding – Returns on the token will require delayed gratification and this is particularly difficult in these markets where the cost of living is exploding.
- Authority pressures – Do Kwon is a wanted man, and the outcomes of the legal action are unknown. Regulators could probably try prying into the mechanism of the token affecting the trust of the public.
Pros and Cons of LUNA
The coin is very promising and yet at the same time faces serious impediments that threaten its very existence.
Pros of investing in LUNA:
– Improved Reliability
– Huge Following
– Supported by major exchanges & Wallets.
– Improved Tokenomics
– Rising Trading Volume
Drawbacks of investing in LUNA:
– Cut-throat competition
– Increased fees due to on-chain tax.
Growth Likelihood and Potential for LUNA
Positive results are already showing following the burns.
Crypto whales are betting big on the possibility of LUNC going to $1. Luna 2.0 could raise north of $10 if the latter event occurs.
In its prime in April this year, Luna hit an all-time high of $104. The burns are already in place, with over 114M disposed of so far.
The price is remained fairly even with centralized platforms like BNB still a bit delayed in implementing the burns.
The Terra classic has more upside potential as the burns will heavily affect it.
The road ahead for Luna is to get back to development and utility features like Decentralized Applications.
The launch of the LUNC growth funding validator will likely put it back on this track. A layer 2 blockchain and interesting components are expected soon.
LUNC could grow rapidly in the next coming years, especially since it is at the bottom.
Overall Verdict on LUNA as an investing opportunity
Luna is poised to do well in the medium term with analysts forecasting a $34 target in the next year and $160 over five years.
The technical factors show there are a lot of divergences right now and patterns indicate the bulls could be accretive.
Terra Classic is a solid buy to serve as a store of value in these turbulent markets.
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