LUNA is one of the cryptocurrencies that has shown a strong recovery after the broader market slump. Since February 21, 2022, Terra’s LUNA has been running like clockwork and quite easily ranks among the top performers on the market. News about the coin is also promising thanks to the increasing popularity of its US dollar-pegged stablecoin – the UST.
The aggressive progress of coin-burning has played a huge part in making it a good deflationary currency to invest in (more on this later).
Technically, the altcoin is doing quite well. It hit its high of December 27, 2021 less than a week ago and is currently waiting for a chance to break through the stiff psychological resistance of its ATH around $104. The interesting point to note here is that it has steadily recovered despite the mundane state of the general market.
It even broke out of the 50 and 200 daily moving averages.
However, there are also some caveats. The press time price structure appeared to be forming an ascending triangle pattern, suggesting that there may be a correction on the books in the future.
Ergo, investors and traders entering LUNA now should not expect price increases right away. There may also be a period of consolidation or even a minor correction before the ascending triangle becomes invalid and rises.
However, fundamentals point to positive prospects for the future. Dates from messari found that both circulating market cap and market cap have steadily increased across the board. For reasons listed later, LUNA is increasingly becoming a deflationary asset and the rising popularity of the UST stablecoin has also helped.
In addition, data was collected from SmartStake.io underlines the reason behind this huge increase. In the past month alone, $2.33 billion worth of LUNA tokens have been withdrawn from circulation.
To put the icing on the cake, take a look at how UST’s supply is also steadily increasing on a daily basis – a sign of increasing market demand and popularity.
This would lead to further developer activity in the chain, improving the network as a whole.
Ergo, despite technical indicators pointing to the possibility of a minor correction in the near term, the medium to long term future looks bright.
Therefore, the incoming dip can be interpreted as a buy-the-dip proposition thanks to strong fundamentals across the board.