Terra has become a controversial blockchain project following the collapse of its native token LUNA and stablecoin TerraUSD (UST) in May. But its recent gains are hard to ignore for cryptocurrency traders.
Luna rising from the dead?
After falling to almost zero in May, LUNA is now trading at around $6, which when measured from its lowest level has risen by 17,559,000% in price in less than four months.
Meanwhile, LUNA’s performance in September is particularly interesting, given that it is up more than 300% month-on-month after a long period of sideways consolidation.
Terra Ecosystem in September
It is important to note that LUNA also trades on several exchanges with the ticker LUNA2.
By extension, TerraForm Labs, the firm behind the Terra Project, split the older series into Terra Classic (LUNC) and Terra LUNA 2.0 (LUNA/LUNA2).
RELATED: Kwon reportedly hires lawyers in S Korea to prepare for Terra investigation
Terra Classic is the native version of the Terra blockchain, while Terra Luna 2.0 was created by TerraForm Labs founder Do Kwon as part of a regeneration strategy. In doing so, Kwon and his team periodically broadcast LUNA2 tokens to users affected by Terra’s collapse.
LUNA/LUNA2 started pumping on September 9th, the day many things happened inside the Terra ecosystem.
First, Terra Classic (LUNC) passed a governance resolution to add a 1.2% tax to all its on-chain transactions. In other words, the proposal would permanently remove 1.2% of the LUNC supply from each on-chain transaction, as Cointelegraph covered here.
Terra Luna Classic (#lank) skyrockets >37,000% from under it since Terra’s collapse
This comes after a proposal to introduce a 1.2% token burn tax on all transactions which would enable $LUNC To become a deflationary cryptocurrency.#lank I #helilunk I $LUNC I pic.twitter.com/oIxI7tqVkW
— Hailey LUNC ️ (@TheMoonHailey) September 7, 2022
Second, Fatman, a self-proclaimed Terra whistleblower, reported a suspicious transaction of 435,000 LUNA2 tokens to Binance, alleging that the sender was TerraForm Labs.
“was having lunch [and] Saw the LUNA2 pump. Checked TFL Dawn Wallet. Sure enough, after months of farming rewards with airdrops they claim they never received, they sent all 435K available LUNA 2 to Binance a few days ago. He’s just an address.”
,@kleop Numbers up – TFL sent a total of $3.9 billion USD (in UST) to exchanges including Binance and KuCoin.
Let the enormity of that figure sink in, and consider how many people’s savings have added up. The biggest fraud of crypto.
no explanation from @stablekwon https://t.co/qc2kCFPMHW
— Fatman (@FatManTerra) September 9, 2022
However, Do Kwon denied the allegations.
The September 9 pump also took place a week after Terra passed a resolution to hold a second airdrop of over 19 million LUNA tokens by October 4.
Luna Price Technicals Lean Bearish
From a technical perspective, LUNA price is going through a massive correction in the coming days.
Firstly, on the four-hour chart, the coin’s relative strength index (RSI) has jumped above 70, which is considered an overbought area with a higher chance of a correction. Secondly, since September 9, the price is forming an ascending wedge, a bearish reversal pattern.
Specifically, a rising wedge is formed when the price is trending higher within an ascending range whose upper and lower trend lines converge towards each other. This gets resolved once the price breaks below the lower trendline along with an increase in trading volume.
As of September 11, LUNA was testing the lower trendline of its wedge for a potential breakdown move. In this case, the price will risk falling to the maximum height of the wedge.
In other words, LUNA could drop by 30% from today’s price to $4.5.
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