Luna, Terra’s main digital currency, has lost about 30 percent of its value in the last 24 hours. The collapse is largely due to fundamental factors related to the Moon, but as the graphs show, the digital currency may continue to fall even more.
According to the Quinn Telegraph, fears, uncertainties and doubts about the stability of the Quinn Tera network, UST, have led to a sharp drop in the price of Luna.
The price of Luna has fallen by about 30% in the last 24 hours, reaching $ 58. This is the lowest price of Luna in the last three months. Yesterday, just before the price of the moon fell, a whale sold $ 285 million from US Stable Quinn, and as a result of that sale, the value of $ 1, which would normally be $ 1, fell to $ 0.98.
According to the monetary policy of the Terra Protocol, the Luna token is used to maintain a constant US price. As a result, when the value in the United States is more than $ 1.00, the Terra protocol encourages its users to create new US by burning Luna. Conversely, when the price of UST falls below $ 1.00, the Tera protocol encourages and rewards its users to burn their UST and receive Luna in return.
Therefore, as US supply declines, the value of Luna should naturally decrease. Will Comins, a researcher at the analytical website Messari, said that in the same way the value of Luna increases with increasing supply in the United States.
The graph below shows the steady downward trend in the daily supply in the United States (bottom of the image), which was accompanied by a relative increase in the daily supply of Luna (top of the image). On May 8, the trend of changes in supply in the United States fell for the first time in two months, reaching minus 28,100 points. On the same day, Luna’s supply increased by 436,768 units.
Overall, Luna’s oversupply in the face of declining demand or stable market demand may be the reason for Luna’s falling prices in recent days.
The constant decline in the price of Luna pushed the digital currency to the intersection of its 50-week moving average (EMA 50 – red line in the photo) and a relatively upward trend line for several months close to $ 56.
It should be noted that this uptrend line together with another uptrend line has formed an increasing angular pattern of the chart. The incremental angle is a reversible and descending pattern. As a result, its formation on Luna’s weekly chart shows that the price of this digital currency may fall even more in the future.
From the point of view of technical analysis, the failure of the uptrend model leads to a reduction in the stock price as much as the maximum distance between the upper trend line and the lower trend line of the model.
Therefore, if the price of Luna falls below the uptrend model and intersects with the 50-week moving average, followed by an increase in trading volume, the price could fall to about $ 22.50; A level that is approximately 60% of the current price.
On the other hand, if Luna hits that support and then moves to the uptrend line of the uptrend model, her next target will be over $ 130, which is a new record.
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