The increase in the volume of transactions has made the price of LUNA multiply almost five times in a month. The token is likely to hit new all-time highs soon before a significant correction.
The LUNA token is growing as fast as the adoption of its blockchain Terra. That protocol seeks to offer stablecoins pegged to fiat currencies to supply the payment system worldwide.
LUNA is the main tool to stabilize the prices of those stablecoins, at the same time that it works as a method of governance of this blockchain.
The token’s price recently reached USD 33.39 after growing by 39.74% in 24 hours, thus reaching a new all-time high.
The dramatic escalation of its price led it to occupy 12th place in the cryptocurrency ranking.
What is Happening with the LUNA Token and its Blockchain Terra
In the last month, the price of the LUNA cryptocurrency has multiplied almost five times. The main reason behind that is the dramatic increase in the volume of transactions that it has had.
The large number of traders who have bought and sold LUNA may be related to Coinbase. The exchange has been supportive of the crypto asset, which may have driven expectations about it.
On August 12th, Wrapped Luna and Terra USD (UST) went public on Coinbase. Although they are not the same as the LUNA token, the three cryptocurrencies are interrelated.
There have been deposits of more than 60,000 ETH to mint tons of UST as loans. Meanwhile, the LUNA equivalent burns, resulting in a price increase.
The number of addresses owning UST increased from 80,000 to more than 460,000 in one month, demonstrating a high speed of adoption.
Another factor may be driving the rally of this cryptocurrency. The Columbus-5 update will occur on the Terra network, which will allow the creation of more applications and better financial incentives for users.
The Technical Analysis of LUNA
Nearly 500% of the gains in the last month show just how developed the current momentum is.
That does not mean it should be exhausted anytime soon. On the contrary, LUNA is more likely to hit new all-time highs in the next few hours/days before a significant correction.
Momentum is currently developing after a significant correction, thus resuming the medium/long-term trend. It may even seek to expand further.
The best part in the short term is over, but a coming correction could contribute to purchases at better prices.
The daily chart indicates that momentum has also spread, but there are no signs of exhaustion. In any case, each extension of the rise allows the pullback to come closer.
The 8-day EMA and 18-day SMA moving averages could serve as dynamic support if a correction occurs in the short term.
Recommendations for Investors Interested in LUNA
Regardless of the great popularity and increase in price, people should know LUNA well before investing in it.
The same as with other cryptocurrencies, investors should exercise caution, as emotions can influence them easily. That could lead them to make wrong decisions due to the pressure of volatility.
However, if they do detailed research, they will be able to realize the strengths of LUNA. That way, they will have a clear mind to set reasonable investment goals.
By Alexander Salazar
