Terra has become a controversial blockchain project after the collapse of its native token MOON and TerraUSD stablecoins (UST) in May. But its recent gains are hard to ignore for cryptocurrency traders.
LUNA rises from the dead?
After falling to near zero in May, LUNA is now trading at around $6, a whopping 17,559,000% price increase in less than four months from its low.
Meanwhile, LUNA’s performance in September is particularly interesting as it is up more than 300% since the beginning of the month after a long period of sideways consolidation.
Terra Ecosystem in September
It is important to note that LUNA also trades with the ticker LUNA2 on multiple exchanges.
In detail, Terraform Labs, the company behind the Terra project, split the legacy chain into Terra Classic (LUNC) and Terra LUNA 2.0 (MANAGER/MANAGER2).
Terra Classic is the original version of the Terra blockchain, while Terra LUNA 2.0 was created as part of Terraform Labs founder Do Kwon’s regeneration strategy. In doing so, Kwon and his team regularly broadcast LUNA2 tokens to users affected by the Terra crash.
LUNA/LUNA2 started pumping on September 9, a day when many things happened inside the Terra ecosystem.
First Terra Classic (LUNC) he passed management proposals to add a 1.2% tax to all their on-chain transactions on a given day. In other words, the proposals will permanently remove 1.2% of the LUNC supply from each on-chain transaction, as covered by Cointelegraph here.
Terra Luna Classic (#AWAY) has skyrocketed by >37,000% since its post-Terry collapse bottom.
— Hailey LUNC ✳️ (@TheMoonHailey) September 7, 2022
Second, a self-proclaimed Terra whistleblower, FatMan, reported a suspicious transaction worth 435,000 LUNA2 tokens to Binance, claiming that the sender was TerraForm Labs.
“He ate lunch [and] saw pump LUNA2. Checked TFL Dawn’s wallet. Sure enough, after months of farming rewards with a drop they claim they never received, they sent all 435,000 available LUNA 2 to Binance just a few days ago. That’s just one address.”
.@clayop crunched the numbers – TFL sent a total of $3.9 billion (in UST) to exchanges including Binance and KuCoin.
Let the enormity of that number sink in and consider how much people’s savings add up. The Biggest Scam in Cryptocurrencies.
— FatMan (@FatManTerra) September 9, 2022
However, Do Kwon denied the allegations.
The 9/9 pump also happened a week after Terra he passed proposal to make its second airdrop of more than 19 million LUNA tokens by October 4th.
LUNA technical price is slim bearish
From a technical point of view, there is a risk that the price of LUNA will undergo a massive correction in the coming days.
First, on the 4-hour chart, the token’s Relative Strength Index (RSI) jumped above 70, which is considered overbought territory where a correction is more likely. Second, the price since September 9 has formed a rising wedge, a bearish reversal.
Notably, a rising wedge is formed when price trends higher in an ascending range whose upper and lower trend lines converge. It will be resolved after the price breaks below the lower trendline along with an increase in trading volume.
Since September 11, LUNA has been testing the lower trendline of its wedge for a potential breakout move. In this case, the price will risk a drop up to the maximum height of the wedge.
In other words, LUNA could drop to $4.5, which is a 30% decrease from today’s price.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and trading step involves risk, you should do your own research when making a decision.