Whether the Current Terra(LUNA) Spike is Yet Another FOMO in the Bear Market?
Terra (LUNA) price surges more than 57,500% in just 24 hours and surged from 0.00000100 to as high as 0.000524
Yet while the price is maintaining a huge uptrend, the fear of a drastic plunge also hovers, resembling a bull trap
Terra’s (LUNA) price currently appears to have stabilized to a large extent as the prices have surged magnificently. As soon as the exchanges resumed the LUNA and UST trades, people flooded into the market to accumulate LUNA at the cheapest price. And as a result, the prices skyrocketed massively but on the other hand, the traders may also be trapped in such a position that they may not be able to move or escape.
Also Read: Stress Test for LUNA & UST, Is it a Maximalist’s Co-ordinated Attack or Terra’s Peg-Mechanism Failure: Report
This May be Why LUNA Price Rally May Eventually Plunge?
As the crisis skyrocketed and trembled the entire crypto space, the founder, Do Kwon presented a recovery plan. Here, he proposed to cut down the entire supply of LUNA to 1 billion and also distribute them within the community. However, this proposal is yet to be implemented and then a natural recovery could have been ignited.
But currently, the prices have been magnified due to the pure-play of the traders or whales in the crypto space. And hence this carries a high risk of losing huge money for the people who believe the LUNA price has already stabilized. Why LUNA holders may have to lose most of their money is,
- According to the Peg mechanism, UST & LUNA prices are correlated and hence LUNA price may be positively impacted only if UST regains its peg, where the LUNA coins will be burnt
- Interestingly, none of these events has occurred as of now and moreover, the price began skyrocketing quickly as trades were resumed
- Therefore, it is evident that the recovery is being fueled by the whales rather than any fundamentals and hence they may be primed to fall if all liquidate at once
On the other hand, the star crypto, Bitcoin is losing its momentum as it slips down below $30,000. Interestingly, the BTC 24 hr trading volume has plummeted by more than 34% and on the other hand, the volume of LUNA has risen massively by 830.86% to reach above $6 billion. And hence it is clearly evident that once the whales extract their profit, the Terra(LUNA) price is pre-programmed to dump heavily.
As currently, large amounts of Bitcoin are constantly flowing into LUNA and hence these are to be flown back to the star crypto again.