Terra (LUNA) faces the prospects of hitting $100 within the coming weeks because it paints a basic bull pennant construction.
Intimately, bull pennants seem as the worth tendencies inside a triangle sample after a powerful transfer upside. Many analysts see it as an indication of bullish continuation, i.e., they assume the instrument would finally break above the triangle’s higher trendline to resume its price rally higher.
Moreover, the revenue goal of a bull pennant construction usually involves be the size equal to the scale of the earlier worth rally, referred to as flagpole, when measured from the breakout level. Because it seems, LUNA has been forming a similar pattern on its lower-timeframe chart.
Contemplating the breakout occurs on the level the place the bull pennant trendlines converge — the apex — the best revenue goal comes out to be over $22, the flagpole top. That places LUNA on the highway to virtually $100.
Supportive bullish catalysts
The bullish technical setup within the Terra market appeared as LUNA rallied practically 65% in lower than three weeks to turn into the tenth-largest cryptocurrency by market capitalization.
The digital asset jumped previous Dogecoin (DOGE) and Avalanche (AVAX) to worth over $28.60 billion, virtually 1.18% of the present whole cryptocurrency market valuation of $2.30 trillion. In the meantime, LUNA’s token worth climbed from $43.50 to over $77 on Dec. 5, a brand new all-time excessive.
Merchants took cues from Chiron Partners, a Hong Kong-based venture capitalist firm, that introduced Dec. 8 that it had raised $50 million for a devoted fund, dubbed Chiron Terra Fund I, to construct decentralized finance (DeFi) and metaverse-linked nonfungible token (NFT) tasks atop the Terra blockchain.
The volatility absorption function, specifically, proves to be the most bullish case for LUNA. Notably, the Terra ecosystem maintains its stablecoins fiat-peg by burning LUNA tokens. In different phrases, if the worth of Terra’s native stablecoin TerraUSD (UST) goes above $1, the protocol burns LUNA to mint extra UST, thus bringing its worth again to $1.
Conversely, if the UST worth goes under $1, the protocol swaps the stablecoin for LUNA to prop up its costs. With the Columbus-5 improve and Chiron’s $50-million fund promising to convey extra tasks to the Terra ecosystem, anticipations of extra deflationary stress on LUNA have been rising.
As Cointelegraph reported, UST stablecoin adoption is growing with its web provide hitting a brand new file excessive of $8.221 billion on Dec. 8. However, in response to TerraAnalytics, the Terra protocol has burned greater than 104 million LUNA tokens ever because the Columbus-5 improve went reside on the finish of September.
Talis’s $2.3M NFT market
Bullish cues for LUNA earlier than the Chiron announcement additionally got here within the type of Talis. The startup raised $2.3 million in funding led by ParaFi Capital and Arrington Capital to construct an NFT market on the Terra blockchain.
The views and opinions expressed listed below are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, it’s best to conduct your individual analysis when making a call.