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The last seven days have been quite eventful for Terra (LUNA) token, which currently sits as the 11th largest cryptocurrency, with a market cap of $24.2 billion. Even though the coin suffered a strong price drop that started on Friday, and then continued during the weekend, and even on Monday — things started to turn in its favor as this week progressed.
LUNA recovers from a major price drop
Following its price surge that started around 20 days ago, on November 27th, Luna skyrocketed from its bottom at $41 to an all-time high at $78.19. However, it wasn’t long before it corrected to $67, only to shoot up again, this time to $72. However, the price correction that started back when it briefly breached a resistance at $75 was still too strong, and over the course of the next few days — between December 9th and 14th — the coin dropped from $78 to $50.
Interestingly, however, LUNA then made a v-shaped recovery after rallying by over 10% in the past two days alone, once again making the market look bullish. Despite the price behavior over the last week, this bullishness indicates that Terra was fortunate enough to dodge the downwards pressure that has hit many other major cryptos quite strongly.
The rally may have been caused by Kraken
Of course, it is highly unusual for cryptocurrencies to see a price surge in the middle of a Bitcoin price drop, especially since the rest of the market followed Bitcoin’s lead. However, LUNA had one advantage compared to the rest of the market, and that’s the fact that a major crypto exchange, Kraken, recently announced its support for the coin.
The announcement went live three days ago, on December 14th, noting that trading will start on December 16th. The funding was already live at the time the announcement was made, while order entry and execution began yesterday. The support likely inspired traders and investors to start buying LUNA, hence the coin’s price increase and the ability to go against the market sentiment.
Kraken also paired LUNA against USD and EUR, which made it easier to directly invest into the coin. However, Kraken’s move might not be the only reason why LUNA is seeing a price shift that goes against the rest of the market.
LUNA starts token burning
Ever since the start of December, LUNA has been engaging in token burning, which likely added to its price resilience during the time when most of the market seemed bearish. It certainly did help it reach a new all-time high. Plus, according to Crypto-Economy, the project received a crucial Columbus-5 Upgrade to its network, which also helped boost the asset’s price.
As for the burning initiative, it was estimated that around 107 million LUNA tokens have been burned — locked away forever, and unable to return to circulation. As a result, the supply was decreased, and Kraken listing increased demand, hence LUNA’s ability to resist the corrections.
To learn more about this project visit our Investing in Terra guide.