LUNA back to Earth after reaching the Moon
LUNA’s wild price movements have got investors in a frenzy. The token price rose to $7.82 from $1.91 on September 9, 2022. The value of LUNA stayed at $6 but fell sharply to $0.0003 in the last 24 hours, which is approximately by 38%. The LUNA price spike was the highest seen by the asset since its launch in June, 2022.
Source: Trading View
What triggered LUNA’s spike in price?
LUNA has introduced a tax burning protocol which will imply a 1.2% tax on token burning to bring correction in the value of the token. Its hyperinflated supply. The community has shown complete support for this regime to help the project regain its place in the crypto market.
— LUNC Burn (@LunaBurn_13) September 12, 2022
“Luna continues to be a risky trade at this time. The basics of the coin won’t be dramatically altered by the new burn strategy. Such transactions are to be avoided, and one should only engage them if they have a suitable exit plan for both gain and downside,” says Dileep Seinberg, Founder & CEO, MuffinPay, Bill Payment & Utility Crypto.
Additional Read: LUNA Price Prediction
Why did LUNA, the original asset of Terra blockchain collapse?
According to the officials of Terra Labs, the stablecoin LUNA was depegged against the dollar due to a spike in the value of US Dollar. According to the team behind the project, the firm has reserves in Bitcoin to tackle the sudden shock of UST and LUNA’s drop in value. However, Do Kwon and a few others were unable to prove that they have enough resources to fix the setback. With a scenario like this, many LUNA investors started selling off the token which brought its demand and supply equilibrium down resulting in a complete failure of the most regarded stablecoin in the crypto market.
It is also believed that Do Kwon may have mislead the project’s financials which costed the entire crypto community over $ 40 billion. However, the founder of LUNA, proposed a asset revival project by offering a newly devised token LUNA Classic – LUNC. The community voted in favor of the proposal and the tokens were airdropped to the community post all crypto related formalities were completed.
Additional Read: LUNA Classic Price Prediction
How has LUNA worked as a bull-bear indicator in the crypto market?
The crash of LUNA toppled the entire crypto market in a matter of days. The community’s belief in the project primarily drove the project to a great height. When the project started showing negative indications, it started impacting the overall industry and when the project was declared ‘dead’ the crypto market collapsed in a matter of hours.
The recent rally of LUNC this weekend sparked hopes in the minds of investors. While crypto investors know that a volatility like this oscillates from time to time, the impact of a price change in a reputed asset like LUNA did open a breakthrough for Bitcoin too.
The price change of LUNC post the burn initiative was an expected outcome. However, according to some experts the token may require a couple of years to reinstate the same confidence and presence in the market.