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Is Terra (LUNA) About to Reverse its ATH?

Taking advantage of the recent rise in the cryptocurrency market, Terra (LUNA) exploded on the stock market. In the space of two days, its price has already increased by almost 30%. Currently, LUNA is trading at $91.80 or less than 10.8 from its highest level on December 27 ($103.34). A question posed by experts and investors: Will he regain his ATH?

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In fact, Terra is one of the few cryptos that performed well during the month of February. According to data provided by Coingecko, the value of LUNA rose 75% in February. While its performance at the end of the month counted for a lot in its monthly growth, the crypto had started to surge since  the announcement of the billion dollar reserve fund.

Destruction Of LUNA: Another Upside Factor

According to Smart Stake, there are nearly 29 million LUNA tokens burned or the equivalent of $2.66 billion in February. Terra burns that coincided with the increase in supply of UST, the stablecoin of the Terra Luna ecosystem. According to what Cointelegraph reported, the UST supply increased from 11.26 million to 12.96 million between February 1 and February 28. 

In practice as the supply of UST grows, traders become increasingly bullish for Terra’s future price. Conversely, when the UST supply decreases, traders are pessimistic about the future of the Terra price. With the backdrop of rising UST tokens, the value of Terra rose due to positive anticipations for the future of cryptocurrency. 

The launch of the bitcoin-denominated currency reserve fund has bolstered the supply of the stablecoin. This fund has just overcome the problems of a “  bank run  ” situation where the demand to sell the stable exceeds the supply in a way that results in compound price declines in the two native tokens. 

Terra (LUNA) Price Chart Analysis

Would Terra (LUNA) be about to reverse his ATH?
Evolution of the course of Terra (LUNA)

 

Graphical analysis reinforces the thesis of an upward trend. We can see that the crypto breaks out of its low point at $46 and rises up to $91.80 in less than 45 days. By greatly exceeding its short and medium term moving averages, the uptrend is well and truly confirmed. The SMA-20 and SMA-50 are priced at $62.49 and $63.22 respectively. 

In terms of comparison, we can see that the bullish movement is very similar to the one in December which saw the price of Terra rise from $53.21 to $103.34. The current movement in demand is approaching the ATH period. In December, the RSI stood at 75.49. With its current value of 74.09, the RSI is gradually approaching the December level. 

On the other hand, if Terra wants to reverse its ATH, it must stay above $90.62 which represents the last resistance bar before the peak. For this, liquidity must continue to influence the crypto. But, at the time of writing this article, we notice that the trading volume tends to decrease intraday. This would indicate a certain tendency for short-term traders to take profits.

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