Terra LUNA has risen to the top of trending coins as users believe the price will rise.
Volatility is not a distant concept for someone familiar with the cryptocurrency world. The collapse of the Terra (LUNA) ecosystem and the subsequent release of LUNA 2.0 in the past two months did not give much hope. Aside from the recent scandal, LUNA has regained 30% of its pre-fall value last week.
LUNA At The Top
In the past 24 hours, LUNA has once again risen to the top of the top trending coins list on CoinMarketCap. In addition, LUNA surpassed PancakeSwap (CAKE) and Terra Classic (LUNC) on CoinMarketCap and rose to the top of the most wanted list.
Is There Still Hope for LUNA?
LUNA has signaled a recovery after the big crash. After the stablecoin scandal, the rise in the past week has shown that investors still trust LUNA and LunaClassic. While these are happening, LUNC continues to attract attention from investors. Also, LUNC’s weekly market volume reached $1.1 billion on August 2. Aside from May’s slump, LUNC continues to be trending and gaining support from investors and the community.
Distrust of LUNA Still Continues
The UST stablecoin chaos caused LUNA prices to fall from $119 to $0.000196. This made us question our trust in LUNA first and then stablecoins again.
Why Did LUNA Fall?
Luna’s stablecoin UST has entered a so-called “death spiral”. To be more specific, LUNA and UST work together to peg the UST stablecoin to the USD. In short, the algorithm converts LUNA to UST if the price is above $1, and UST to LUNA if the price is below $1, so that the UST price always remains equivalent to $1.
Meanwhile, an attack was reported by Luna as explanation, when arbitrageurs started making a profit by instantly selling the UST they bought for $98 for $1. However, it was noticed that instead of selling LUNA when UST was at $.98, an attempt was made to keep the stablecoin’s value at $1 by selling BTC. At that time, with the fall of BTC, LUNA did not have any BTC to support UST, and its value fell for days.
Because of all this, although LUNA continues to be a trend, the market’s distrust still continues.
