Following the May collapse of its native token Terra (LUNA) and stablecoin TerraUSD (UST), Terra has gained notoriety as a contentious blockchain startup. However, its recent increases are difficult for cryptocurrency traders to ignore.
Is LUNA Rising From The Dead?
The behavior of LUNA in September is particularly intriguing given that it has rebounded by more than 300% month-to-date following a protracted period of stabilization in the sideways range.
It is important to remember that LUNA also trades on many platforms under the ticker LUNA2.
The company responsible for the Terra project, Terraform Labs, separated the previous chain into Terra Classic (LUNC) and Terra LUNA 2.0 (LUNA/LUNA2).
The Terra blockchain’s first iteration is called Terra Classic, whereas Do Kwon, the founder of Terraform Labs, developed LUNA 2.0 as part of a regeneration plan. As a result, Kwon and his group frequently airdrop LUNA2 tokens to people impacted by Terra’s demise.
SEE ALSO: WHY DID TERRA LUNA PRICE CRASH?
On September 9, LUNA/LUNA2 began pumping, a day on which a lot of things occurred within the Terra ecosystem.
First, governance recommendations were approved by Luna Classic (LUNC) to impose a 1.2% tax on all of its on-chain transactions for the day. In other words, as reported by Cointelegraph, the proposals will permanently eliminate 1.2% of the LUNC supply from any on-chain transaction.
Second, FatMan, a self-described Terra whistleblower, allegedly identified TerraForm Labs as the sender of a suspicious transaction for 435,000 LUNA2 tokens and reported it to Binance:
“While eating lunch, I noticed a LUNA2 pump and examined TFL Dawn’s wallet. They sent all 435K of the remaining LUNA 2 to Binance just days ago, having spent months mining rewards with an airdrop they allege they never received. Just one address, there.”
Do Kwon, though, denied the accusations.
The pump on September 9 also took place a week after Terra approved a plan to hold its second airdrop of more than 19 million LUNA tokens till October 4.
LUNA Price Seems Bearish as LUNA rises in September
Technically speaking, the price of LUNA runs the danger of experiencing a significant correction in the upcoming days.
The relative strength index (RSI) for the token has risen above 70 on the four-hour chart, which is seen as an overbought area where a correction is more likely. Second, since September 9, the price has been creating a rising wedge, also known as a bearish reversal pattern.
Notably, a rising wedge develops when the price moves upward within an ascending range with converging upper and lower trendlines. After the price crosses below the lower trendline and there is an increase in trading volume, it ends.
On September 11, LUNA was attempting to break below its wedge’s lower trendline. In this scenario, the price runs the danger of dropping by the maximum height of the wedge.
In other words, LUNA may go to $4.5, a 30% decrease from its price on September 11th.