- LUNAUSDT recorded a new all-time high
- Bonded Ethereum (bETH) launched on Anchor Protocol
- LUNA rallied on golden cross formation but retracting on overbought sentiment
JAIPUR (Coinchapter.com) – LUNA logged a fresh all-time high on the back of an explosive rally that began on Sunday, gaining 33% in just the last 24 hours. The LUNA/USDT pair resumed its uptrend from $23.5 during Wednesday’s early morning trading session to tap $33.5.
A combination of fundamental and technical factors contributed to the rally.
Bonded Ethereum (bETH) Launch on Anchor Protocol
Anchor Protocol is Terra Money’s version of a fixed income platform. It lets users earn low-volatile yields on Terra stablecoin deposits. The reference interest rate is pegged to “a diversified stream of staking rewards from major proof-of-stake blockchains.”
Lido is an ETH 2.0 staking solution that lets users stake their ETH “without locking assets or maintaining infrastructure – while participating in on-chain activities, e.g., lending.” Ether depositors receive stETH tokens (on a 1:1 peg basis).
Their partnership took shape with the launch of bonded Ethereum (bETH) on Anchor. The collateral’s relatively recent debut didn’t deter users as Anchor experienced deposits to the tune of 60,000 ETH since Saturday.
Related: Anchor, Lido join hands to launch Ethereum staking on their DeFi platform.
Bonded Ethereum (bETH) is a wrapped version of the staked Ethereum (stETH). stETH is a 1:1 peg of Ether native to the Lido Finance platform, while bETH is to Anchor. The ETH-based collateral lets stETH holders earn staking rewards on Anchor (by converting to bETH).
LUNA’s price rally aligned with bETH’s launch as users leveraged the token to borrow Terra’s algorithmic stablecoin TerraUSD (UST).
“What happens when something new gets product market fit on Terra example:
bETH collateral on Anchor Protocol
– launched 5 days ago
– already 60k ETH deposited
– tons of new $UST minted by users borrowing
– an equal value of $LUNA is burned
– price of Luna goes up”
noted Jason Hitchcock, Principal and Investment Strategist at The Moon Capital
Aggressive burning of LUNA tokens caused supply bottlenecks in the light of massive UST printing. Speculators assessed the scenario to scoop up Terra’s underlying asset en-masse as supply limitations sparked bullish vibes.
Related: Ethereum layer-1 alternatives Solana and Terra hit record highs.
Golden Cross
The LUNAUSDT pair’s massive upside move printed a golden cross setup on Wednesday (on the daily chart). Buyers placed buy bids based on the bullish technical formation, which pushed Terra’s native token to pump explosively.
LUNA has printed 51% gains since Sunday, rising from $16.5 to $33.5. Sellers did book profits Thursday after a face-melting run for the last 4 days. But bulls appeared firm and unwilling to relinquish control of LUNASDT.
LUNA/USDT Price Levels To Watch
However, the pair sparked overvalued concerns with relative strength index (RSI) readings soaring to stratospheric levels. The tussle to maintain the rally’s inertia is on, but bearish pressure has crept in.
RSI ticked above the neutral 50 reading on July 21, but Wednesday’s run pushed the metric close to 92, sparking massive overbought concerns. As a result, sellers anticipated immediate profit booking. Prices revisited the $28.5 support but risked dropping to $23, a level where bulls could get their mojo back again.
