- Terra LUNA price formed a double-bottom pattern.
- With no fundamental value, LUNA is mostly a speculative “asset”.
Terra LUNA price surged and then pulled back as speculation of the cryptocurrency continued. LUNA rose to a high of $1.7977, which was the highest level since August 26. It was about 20% above the lowest level this month, giving it a market cap of more than $212 million.
Speculation at best
LUNA is the native token for Terra 2.0, the new incarnation of the well-known fallen angel that collapsed in May.
Terra 2.0 goal is to accomplish what the original Terra hoped to achieve. It hopes to be a trusted cryptocurrency and blockchain project where developers build quality decentralized applications.
All LUNA that was airdropped in May was staked to validators in order to preserve network security. Some of those funds went to some existing developers to help them continue building their applications. Some of the top apps that were supported at Genesis were Anchor Protocol, Astroport, Lido, and Mirror Protocol among others.
LUNA price did well in its early days as investors speculated that it will become the next big thing. This speculation saw it price rise to $25, pushing its market cap to more than $1 billion. However, its performance since then has been lackluster, which saw it drop to a low of $1.5.
In my view, I believe that Terra LUNA is one of the most speculative cryptocurrencies in the world. For one, it is unclear whether there are any developers using the ecosystem. A look at its explorer shows that the current projects in its ecosystem are Terraswap, Astroport, Knowhere, Steak, Valkyrie, and Packs.
Still, without a stablecoin like Terra USD, it is unclear whether these developers are actively building projects on its ecosystem. For example, Astroport has a total value locked (TVL) of just $15.5 million, down from its all-time high of over $1.5 billion. Also, it is unclear whether users will trust Terra and its ecosystem again.
Terra LUNA price prediction
The four-hour chart shows that the LUNA price formed a double-bottom pattern at around $1.5173 recently. In price action analysis, this pattern is usually a bullish sign. It is consolidating at the 25-day and 50-day moving averages and the standard pivot point.
A closer look shows that it has formed what looks like a head and shoulders pattern. Therefore, at this stage, Terra Luna is a relatively risky coin to buy. A move above the resistance at $1.853 will invalidate the H&S pattern and see it rising to the second resistance point at $2.
On the other hand, a drop below the support at $1.5173 will see the coin drop to the next key psychological level of $1.
