Terra (LUNA) logs 40% in 2 days; 3 reasons behind the rally

terra luna ust nft columbus -5
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Key Terra Takeaways:

  • Terra (LUNA) rallies on and piles 40% in the Wednesday and Thursday sessions, with several factors fueling the uptrend.
  • Bitcoin recovery played a major role and influenced LUNA.
  • The upcoming blockchain upgrade fueled the anticipation, and subsequently the bullish price action.
  • Some experts believe Terra is a fertile ground for NFT creation, which is a hot trend in DeFi.

YEREVAN (CoinChapter.com) – Terra stablecoin issue protocol’s governance token LUNA was up 40% since the latest Sep. 20-21 dip, and traded at $35.5 in the New York session Thursday. The platform currently ranks #12 by market cap (over $13.5 billion) and it might be primed for an uptrend continuation, considering the following 3 factors.

#1 Bitcoin recovery

The alpha crypto accounts for almost half of the total digital asset market cap ($1.97T). Typically, Bitcoin’s price action sends ripples far across the altcoin market, influencing the charts, with a higher amplitude. Terra’s LUNA is not an exception.

LUNA's dependency on Bitcoin. Source: LUNAUSD on TradingView.com
LUNA’s dependency on Bitcoin. Source: LUNAUSD on TradingView.com

May 9-23, when Bitcoin lost 41%, LUNA shed 76% off its value. Similarly, June 15-21, the flagship cryptocurrency dropped by 23%. Terra followed suit with a 31% loss. July 21-31, BTC charts registered a 44% recovery, while LUNA piled on 101% in the same period. The latter’s rally continued far beyond Aug., bringing the total gains to 660% by Sep. 10.

Bitcoin price action. Source: BTCUSD on TradingView.com
Bitcoin price action. Source: BTCUSD on TradingView.com

Also read: Terra (LUNA) primed to log another record high; here’s why

#2 Upcoming Columbus-5 mainnet launch

Terra protocol has a major upgrade ahead, dubbed Columbus -5. The network initially scheduled the launch for Sep. 2. However, the rollout was postponed for a few additional weeks. The new much-anticipated date is Sep. 29. The upgrade will bring several core improvements to the blockchain.

In detail, Columbus-5 will introduce a new token-burning protocol to the blockchain. Currently the platform burns its governance tokens (LUNAs) to create stablecoins, but only partially. After the launch, Terra will burn all of the LUNA involved, leading to a supply squeeze. The latter is likely to propel the token value further.

Columbus-5 will also create a safety net for users, and developers building on the platform. The upgrade will also establish a bridge between Terra and Solana blockchains and allow interchain communication between Terra, Solana, Cosmos, and Polkadot ecosystems.

Also read: Cardano enters the smart contract scene only to lose 20%; declining DeFi sector to blame?

#3 Terra: fertile ground for NFT building

A strategy consultant that goes by the Twitter handle Terranaut, offered their views on why they consider Terra to be an ideal platform for building NFTs (non-fungible tokens). Firstly they pointed out that the stablecoin issue protocol has already successfully launched several “innovative financial products”, such as Anchor protocol and Mirror protocol.

The former is a savings dApp that allows users to earn a 20% yield on their stablecoins. The latter is a platform that enables the trading of synthetic stocks and assets. Moreover, with the launch of Columbus-5, Terra will see its dApp building possibilities expand.

It is my belief that some of the upcoming launches will create unique opportunities to develop use cases which deeper embed NFTs and DeFi.  

Asserted the consultant.

Terranaut also pointed out that user experience is of paramount importance for Terra developers. “Simple, sleek experience for users which far outweighs competitors” will, in their view, ease the creation and use of NFTs.

Also read: Bitcoin (BTC) informational website hacked by scammers; domain disabled after over $17.8k theft

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