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Terra's LUNA Makes Big Gains - Why It's Worth Watching

Terra’s LUNA Makes Big Gains – Why It’s Worth Watching

Posted Wednesday, August 4, 2021 by
Aiswarya Gopan • 2 min read

Terra’s LUNA is experiencing a slight dip after a strong rally over the previous session, but is still in the green, up by over 13% in the past 24 hours. At the time of writing, LUNA/USD is trading around $13.84.

The Terra protocol backs a TerraUSD stablecoin and is seeing an upward rise in its value despite the ongoing weakness in the crypto market after Bitcoin experiences further weakness under the $40,000 level. One of the biggest reasons for its strong bullish trend is its rapid adoption of its blockchain network by partners and projects.

In addition, the network recently announced the addition of a wrapped Ether token to its Anchor protocol so that its users can stake ETH rewards on its platform. In just about three years since its inception, it has beaten other stablecoin platforms owing to its promising use cases – its Mirror protocol lets users track real-world assets by creating their own tokens while its Anchor protocol supports lending and saving capabilities.

Terra’s unique tokenomics – the mechanism with which it maintains the stability of its tokens’ values, also shows more promise than that of its competitors. Every UST that is minted on Terra requires LUNA’s supply to be burned, ensuring that the value of UST is maintained while LUNA turns more attractive as far as investors are concerned.

LUNA is also likely to enjoy support from recent analysis shared by influencer and crypto trader Michaël van de Poppe. He is extremely bullish about its prospects, although he has cautioned his followers to look out for a possible retrace before its bullish momentum is restored in the coming sessions.

Key Levels to Watch

On the 4-hour chart of LUNA/USD, buying averages and the MACD indicator are exhibiting a strong bullish bias. Although, the Stochastic and momentum indicators do point to some selling pressure as well.

LUNA/USD

Terra’s LUNA is holding well above the pivot point at $10.73 and continues to remain above the first resistance level at $13.41 at the moment. Looking ahead, buyers will face more resistance at $14.86 and then again at $18.99 before its price can rise above the key $20 level.

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