We live in a time of great volatility and astounding market crashes, when it comes to cryptocurrencies. The talk of the day is all about Luna price prediction, considering how it’s going at the moment of this article.
Basically, the Terra stablecoin has a variable counterweight known as Luna. The entire system incentivizes network participants to adjust the price by using the pools of Terra and Luna.
Due to the fact that stablecoins get their value from being price-stable, which is different than other cryptocurrencies that are prone to volatility, Terra’s protocol tries to always have a balanced supply and demand. This happens by using arbitrage. But let’s dive a bit more into what exactly is Terra and what could be the Luna price prediction.
So what is Terra? What is the current Luna price prediction?
Terra is an open-source blockchain payment platform for algorithmic stablecoins, which are cryptocurrencies that automatically track the price of currencies or other assets. The Terra protocol creates stablecoins designed to consistently track the price of a fiat currency (a government-backed currency such as the U.S. dollar or euro).
The Terra blockchain enables users to instantly spend, save, trade, or exchange Terra and Luna—the two cryptocurrency tokens that make up the protocol— empowering them with more ways than ever before to use digital money in their everyday lives.
The price of Terra Luna Classic has fallen by 5.5% in just 24 hours and is currently trading at $0.00024898. Over the course of the one week, the altcoin has lost 11% of its value, and 19% over the last two weeks, as an earlier rally this month loses steam. Despite ongoing token burns by Binance and other parties, it does not appear to be enough to keep prices from falling further.
While LUNC may have had the highest performance out of all major cryptocurrencies since its all-time low on May 13th, it’s possible that its post-crash rally is coming to a close. That being said, companies burning their tokens does aim to reduce supply significantly, which could have a positive effect on price if demand remains steady (or rises).
Can we expect Terra Luna’s price to increase tenfold in the near future?
LUNC’s price chart tells us that it has been on a low ebb recently and may be due to a bounce. Its relative strength index (purple) has fallen to almost 20 in the past couple of days, before beginning to rise in the past day, indicating signs of a possible rebound.
Additionally, its 30-day moving average (red) continues to fall below its 200-day average (blue). This technical indicator would suggest that LUNC is undervalued and has potential to increase in value again.
The Terra Luna Classic community announced a tax burn of 1.2% in early September, while Binance has undertaken a separate burning of the trading fees it collects in LUNC, which so far has destroyed more than 8.5 billion LUNC. These are both good reasons for investors to be optimistic about Lunc rallyng again soon. The tax on all LUNC transactions has been lowered to 0.2%. While this may not be ideal, the same proposal insures that 10% of the taxes will go into a community development pool in order to help improve the Terra Classic ecosystem.
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