Chiron Partners’ $ 50 million fundraising to support Terra-backed projects has increased investor appetite for the LUNA cryptocurrency.
The price of the Luna (Terra) cryptocurrency faces the prospect of reaching $ 100 USD in the coming weeks as it paints a classic bullish flag structure.
In detail, bullish flags appear as price trends within a triangle pattern after a strong bullish move. Many analysts see this as a sign of a further bullish chase, which means that they believe that the instrument will eventually break above the trend line of the upper triangle to resume the price rise.
Also, the profit target of a bullish pennant structure is usually the length equal to the size of the previous price increase, known as the flagpole, when measured from the break point. As it appears, the price course of the LUNA cryptocurrency has formed a similar pattern on its lower period chart.
Terra Chart (LUNA / USDT) 4 hours
While the breakout occurs at the point where the bullish pennant trend lines converge, the top, the ideal profit target is over $ 22 USD, the height of the mast. This puts the price of the LUNA cryptocurrency on the way to almost $ 100 USD.
Favorable bullish catalysts
The bullish technical setup of the Terra market emerged as LUNA surged nearly 65% in less than three weeks to become the 10th largest cryptocurrency by market capitalization.
Digital assets outperformed Dogecoin (DOGE) and Avalanche (AVAX) to reach over $ 28.60 billion, nearly 1.18% of the current total cryptocurrency market valuation of $ 2.30 trillion. Meanwhile, the LUNA token price rose from $ 43.50 to over $ 77 USD on December 5, a new all-time high.
LUNA’s outstanding market capitalization
Investors were inspired by Chiron Partners, a Hong Kong-based venture capital firm, which announced on December 8 that it had raised $ 50 million for a dedicated fund, dubbed Chiron Terra Fund I, to create decentralized finance (DeFi). and not expendable. linked to metaverse and token (NFT) projects on top of the Terra blockchain.
Jake Cormack, COO of Chiron Partners, attributed Terra’s growth potential to his decision to choose them as its official public ledger, especially after the recent Columbus-5 blockchain upgrade, which promises to enable greater scalability and interoperability between chains.
In detail, the Terra ecosystem consists of a family of stablecoins attached to a growing list of fiat currencies and a mining token, LUNA. The LUNA cryptocurrency serves as a government token, a volatility absorbing tool, and a recipient of rewards through “seigniorage” and transaction volumes.
The volatility absorbing characteristic, in particular, is proving to be the most optimistic case for LUNA. In particular, the Terra ecosystem maintains its fiat-peg stablecoins by burning LUNA tokens. In other words, if the price of Terra’s native stablecoin, TerraUSD (UST), exceeds $ 1, the protocol burns LUNA to reach more UST, reducing its value to $ 1.
Conversely, if the value of UST falls below $ 1, the protocol exchanges the stablecoin for LUNA to support its prices. With the Columbus-5 update and Chiron’s $ 50 million fund promising to bring more projects to the Terra ecosystem, expectations of further deflationary pressure on the LUNA cryptocurrency have risen.
As Cointelegraph reported, adoption of UST stablecoins is on the rise and their net supply hit a new high of $ 8.221 billion on December 8. On the other hand, according to TerraAnalytics, the Terra protocol has burned more than 104 million LUNA tokens since the Columbus -5 update went live in late September.
Talis $ 2.3 million NFT Market
The bullish indices for the LUNA cryptocurrency prior to Chiron’s announcement also came in the form of Talis. The startup has raised $ 2.3 million in funding led by ParaFi Capital and Arrington Capital to create an NFT marketplace on the Terra blockchain.
LUNA / USDT vs BTC / USD chart
Two days after the announcement, the price of the LUNA cryptocurrency rose almost 13% to its new all-time high despite a major correction in Bitcoin (BTC), Ethererm (ETH), and most other cryptocurrencies.
By Yashu Gola, Cointelegraph
Yashu Gola is a Mumbai-based financial analyst who has been covering the crypto industry since 2014. Prior to his career as a journalist, Yashu was a security analyst at Premiershield and a writer at Appin Technology.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and business move carries risk, you need to do your own research when making a decision.
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