LUNA / USD – Forecast Summary
Price: $100 – $200
Price drivers: Growing adoption, developments on Terra Network, positive market sentiment
|Outlook: 2 years
Price: $200 – $300
Price drivers: new use cases, crypto adoption, crypto legalization,
|Expectations: 3 years
Price: > $300
Price Drivers: Growth in DeFi, Crypto Legalization, Growing Adoption of Cryptocurrencies.
After massive growth last year, 2022 presents an exciting year for LUNA fans. Market experts expect Terra to play a significant role in the DeFi space this year. CEO of Pantera Capital, Dan Morehead, He commented on LUNA saying: “It is growing at a rapid rate. We think it is one of the most promising coins for the coming year, so a lot of people are starting to discover it and are just starting to trade it.” Terra’s CEO expects it to continue to gain momentum, saying he expects it to venture into more interesting things that will spur growth.
Having hit a price above $100 in 2021, we expect LUNA/USD to reach $200 in 2022 and $300 in the next two years. Our price prediction for the next three years is LUNA/USD at no less than $300, backed by technical and fundamental analysis.
Price history LUNA / USD
Terra (LUNA/USD) remained low, trading below $10 until March 2021, with daily volume reaching $842.80 million. The pair rose to $21.88 on March 21, 2021 before settling in a consolidation pattern. The Luna/US dollar is between $18 at the end of March and $12 as of May. This was followed by a drop in the price of LUNA/USD, from $15.74 on May 19, 2021, to $4.09 on May 23, 2021, where it lost 284% in about five days. Bearish sentiment kept LUNA/USD in a consolidating pattern between the end of May and July, when it traded below $8.64, with a 24-hour trading volume of $445.15 million.
Recent price changes
LUNA/USD opened the last quarter of 2021 in a consolidation pattern. The pair traded at $41.70 on October 1, 2021, and remained range-limited, with $37 serving as support and $54 as resistance. The pair then put in some upward momentum on November 26, climbing from $40.79 to a high of $75.37 at the beginning of December 2021. The bullish momentum led to a gain of 83.87% in about two weeks, but the pair retreated to $53 on December 13. , before climbing to an all-time high of $105 on Dec. 26. The rally turned 87.83% in 10 days. At the time of writing, LUNA/USD is trading at $87.59, coming from a market recovery.
Recent changes in LUNA/USD rates
|a period||change ($)||% changes|
|week 1||+2.29||+ 2.68%|
|1 month||+12.38||+ 16.46%|
|3 months||+40.85||+ 87.40%|
|6 months||+81.64||+ 13.72%|
|One year||+86.79||+ 10,848.75%|
Stream [[LUNA/USD-name]]the price: [[LUNA/USD-price]] [[LUNA/USD-graph]]
Driving factors for adoption
The importance of stablecoins
The increasing importance of stablecoins has boosted Terra’s market cap and the resulting rally in LUNA. Stablecoins will remain vital in the cryptocurrency space as they connect digital assets and fiat currencies. Terra offers fixed rate cryptocurrencies that can facilitate global transaction payments. The solution has been adopted at the institutional level. Terra announced a partnership with Chai, a South Korean payment company, in 2019. The protoco’s automatic and flexible cash offer offers a cheaper option in cross-border exchange and lower fees. If Terra can sustain rapid adoption of its solution, LUNA could explode further and achieve higher price levels.
Terra’s Columbus-5 upgrade launched in 2021, boosting confidence among LUNA investors. The upgrade supports the Inter-Blockchain Communication standard. IBC allows users to transfer assets such as LUNA and UST from Terra to other protocols and vice versa. The upgrade also introduced a shrinkage gauge. When UST coins are minted, LUNA is burned. This is a change from the initial tokens structure. Prior to the upgrade, when floor lockers went above $1, users could transfer $1 from LUNA to a community pool for an equivalent amount of floor lockers. Completing the upgrade is a positive path for the network that can maintain positive momentum moving forward.
Developments in the Terra ecosystem
Terraform Labs, the company behind Terra, has created multiple initiatives to drive the growth of the network. The initiatives aim to roll out an enhanced, decentralized financial system from the influence of traditional financial institutions. Terra has dedicated itself to providing the tools for developers to create decentralized applications. With the LUNA network gaining popularity among developers and investors, LUNA will maintain a steady upward momentum.
Risk Factors for Terra Luna
The price of LUNA could be affected significantly if the network is unable to maintain the value of its stablecoin peg. LUNA’s performance is linked to the stablecoin price movements associated with it. A stablecoin like UST which is backed by dollars in the Terra network could negatively affect the price of LUNA in a bear market. Terra is also facing competition from other decentralized finance networks in the blockchain such as Etheruem and Binance Smart Chain. If competition becomes more intense, LUNA could face a snag.
The US Securities and Exchange Commission has raised concerns about whether Terra is dealing with an unregistered security offering. Overall, the rise in stablecoins has caught the attention of regulators, with some jurisdictions around the world calling for immediate policies to control stablecoin issuers. If the regulations affect stablecoin operations around the world, Terra will be affected, and the price of LUNA may remain low in the long run. Terra is less decentralized compared to other networks like Ethereum. This aspect can jeopardize the security of the platform in the long run.
Terra is still in the early stages of development compared to other established networks such as Ethereum and Binance Smart Chain. Network stablecoins have not yet gained popularity and are outperforming other issuers. Alternative global payment protocols such as XRP, Steller, and Celer also rival Terra’s operations. XRP is ahead of Terra with a market capitalization of around $35 billion, while Stellar has a market capitalization of $6 billion. Both compare to Terra’s market capitalization of $25 billion. Terra needs to cover enough reasons to keep the price of LUNA.
LUNA/USD Technical Analysis – No End in Sight as Token Exceeds $100
LUNA/USD daily chart is showing bullish momentum from higher highs and higher lows
While most cryptocurrencies have taken a breather since November 2021, LUNA/USD only briefly corrected before moving to a new all-time high of $105 on December 28. The rise saw the token become one of the top ten cryptocurrencies by market capitalization. From the daily chart below, LUNA/USD maintained a clear uptrend of higher highs and higher lows, only briefly correcting the previous highs. Now, LUNA/USD is correcting from ATH at $105 with no end in sight as the bullish momentum holds.
On the daily chart, the RSI reading of 55 shows that LUNA/USD is neither overbought nor oversold at the current level which may once again attract buyers. SMA 50 (blue) and SMA 100 (red) are both supporting the price which means that the bullish momentum is not over yet.
LUNA/USD Weekly Chart Shows Parallel Movement – $80, $55 and $22 Key Levels
On the weekly chart, the bullish momentum of LUNA/USD can equate to the movement of a parabola. The corrections to the downside were very short while the bullish jumps were quick, leaving limited levels of price action that we can use to predict key market action points. Once again, SMA 50 and SMA 100 act as support, with the price staying above the trend line. On the other hand, the RSI reading of 70 may indicate that LUNA/USD is in overbought territory. The RSI has already touched a reading of 81 before the price correction and it is still progressing lower.
Despite being in overbought territory, LUNA/USD is still in an uptrend as evidenced by bullish momentum and moving averages. Further correction is expected in the next few days before new buyers join in to push the price above the ATH level.
Key LUNA/USD Levels to Watch
2022 presents an interesting year for LUNA/USD given the token’s strong increases in 2021. While there is no immediate support visible, the $80 price area remains the potential area where LUNA/USD could stabilize into an ongoing correction. It is the level where the token has shown some hesitation and buyers should monitor it for a possible reversal.
Other key levels to watch for LUNA/USD to break below $80 are $55 and $22. The $22 level is the most established support but we don’t expect the price to drop that much if the Terra ecosystem continues to enjoy the massive adoption that started in 2021.