Key Terra LUNA coin price takeaways:
- Stablecoin issuance patform Terra gained in total value locked (TVL), and it’s arguably close to flipping Binance Smart Chain (BSC).
- Terra’s UST stablecoin is in competition with Ethereum’s DAI.
- However, the platform’s governance token LUNA price could decline based on bearish technicals.
YEREVAN (CoinChapter.com) – LUNA coin price has logged impressive 55% gains in the previous week. Additionally, the platform gained 43% in TVL, which stood at $18 billion in the Tuesday session, a record high for Terra. The DeFi analytical platform DeFiLlama shows that without consideration of assets in Staking and Borrowing, Terra overtook BSC’s second rank.
The latter’s TVL without Staking and Borrowing stood at 16.5, 8% lower than Terra. However, once Staking and Borrowing assets are taken into account, BSC’s TVL clocks in at over $21 billion, reclaiming the silver to Ethereum’s gold.
Also read: Ethereum derives hope of year-end rally from bullish options data.
Terra’s bull run was partially brought on by growing UST adoption. In hindsight, UST is Terra’s Stablecoin, pegged to the US dollar. It is the fifth stablecoin by market cap at $9.17 billion, closely following Ethereum’s DAI. In fact, the UST market cap saw a 19% increase month-to-date.
While UST aims to flip DAI in market cap, LUNA’s price eyed a 55% increase in the previous week. However, the daily chart flashed a bearish warning.
Terra LUNA price prediction
LUNA coin traded in a formation dubbed an Ascending Channel since mid-August. In detail, the Channel consists of two parallel trendlines that enclose the price action and drive the asset’s value up while the formation progresses. The setup does not predict a continuation bias. However, it is instrumental in foreseeing short-term price fluctuations.
In hindsight, CoinChapter forecasted a drop and a subsequent rally in its previous Terra LUNA price prediction on Dec 9. The prediction panned out, confirming the relevance of the Channel. Terra price charted at $81.7 in the European session Tuesday, close to the Channel’s upper resistance trendline.
Should the prediction pan out once again, the LUNA coin could decline by 36% and retest the support at approximately $54. The asset’s rally halted in the Tuesday session’s early hours, so far confirming the aforementioned scenario.
Also read: Terra makes the crypto top 10, as LUNA soars 11% amid market correction.
Moreover, the chart above printed bearish relative strength index (RSI) and trading volume divergences. In hindsight, the RSI is a momentum indicator that reflects the traders’ expectations from the asset’s return potential.
A divergence occurs when the price action establishes higher highs, while there are lower highs on the RSI graph. Additionally, trading volume statistics drew a similar picture. The divergences indicate lowering interest in the asset and a possible decline ahead.
Also read: Omicron fear fuels Bitcoin uncertainty as price continues to plunge.
Despite the growing Terra and UST adoption, the LUNA coin could decline in the upcoming weeks. However, the short-term bearish prediction does not color Terra’s rocketing TVL and firm position in the top 5 DeFi platforms.
