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- Terra (LUNA) shows some bullish patterns on its short term chart
- LUNA has successfully secured a position among the top 10 digital currencies in terms of market cap
- The volatility absorption feature of the asset claims to be the most bullish case for LUNA
Terra (LUNA) crypto project faces the prospects of hitting $100 in the coming weeks as it paints a classic bullish structure. Following the TradingView chart, analysts detailed that the bull pennants appear as the price actions inside a triangle pattern after a strong move up. Notably, many analysts in the cryptosphere see the movements as a sign of bullish continuation. Moreover, it is believed that LUNA would even break above the triangle’s upper trendline to resume its price rally higher.
It is worth noting that the profit target of a bull pennant structure typically comes to be the length equal to the size of the previous uptrend. Such trends are called the flagpole, when measured from the breakout point. Terra shows some similar patterns on its short term chart. Ultimately, the coin is almost on the road to hit $100.
Bullish setup appeared in the Terra market
A bullish technical setup in the Terra market appeared as its native crypto coin rallied nearly 65% over the last three weeks. Notably, after such a notable rally, LUNA has successfully secured a position among the top 10 digital currencies in terms of market cap.
Indeed, LUNA surpassed the most popular meme-coin, Dogecoin (DOGE) and Avalanche (AVAX) and valued itself more than $280 billion. Such a figure is about 1.18% of the total digital assets market valuation which stands near $2.3 trillion.
With an increase in market capitalization, the price of the asset soared as well from $43 to more than $77. However, after soaring significantly, the price of LUNA dropped by more than 7%. At press time, the asset is trading at the price level of $68.37.
FOMO as LUNA is getting scarce
The Terra ecosystem consists of a family of stable crypto assets that are pegged to a growing list of government issued currencies. Notably, LUNA serves as a governance token, volatility absorption tool, and rewards catcher via seigniorage and transaction volumes. Especially, the volatility absorption feature of the asset claims to be the most bullish case for LUNA.
If the price of Terra stablecoin TerraUSD (UST) crosses $1, the protocol will automatically burn LUNA and mint more UST to bring its value back. Simultaneously, if the UST value plunges below $1, the protocol will swap UST for LUNA to prop its price. It is also worth noting that the UST adoption is growing with its net supply hitting new highs.
According to data from TerraAnalytics, the protocol has burned more than 104 million tokens since its Columbus-5 upgrade went live.
What protected LUNA from flash crash?
Bullish cues for Terra before the announcement came in the form of Talis. Notably, the startup upthrusted $2.3 million in a recent seeding round. According to the announcement, the fundraising round was led by ParaFi Capital and Arrington Capital to create an NFT marketplace on the blockchain network.
We have observed that following the announcement, the price of Terra’s native cryptocurrency surged by about 13% and hit a new milestone. Furthermore, the latest announcement also helped to safeguard the coin from the weekend’s major correction in most of the digital assets.
