After losing over 99% of its total value on Thursday, LUNA’s price surged over 1000% to $0.0005395 on Saturday, igniting bullish sentiments among LUNA investors.
This week, LUNA saw its largest sell-off yet, after UST, the algorithmic stablecoin created by Terra fell below the $1 peg, plummeting to $0.22 on Wednesday. The de-peg allegedly came as a result of some big crypto investors dumping the stablecoin for “safer assets” fearing that Terra’s plan to back UST using Bitcoin could backfire.
The situation was further worsened by other stablecoins including Tether (USDT) sinking as low as 95 cents on some exchanges Thursday, alleviating the ongoing “speculation driven fear.”
In the process, Bitcoin also fell close to $26,000 on Thursday, bringing along other cryptocurrencies, with the entire crypto market cap plunging by over 18%. However, it’s LUNA’s sudden drop that seemed to have caught the interest of most traders. After tapping an all-time high of $119.18 on April 5th, LUNA embarked on a typical pullback along with other cryptocurrencies before this week’s gargantuan sell-off.
On Friday, LUNA suffered another blow after the Terra team announced the halt of Terra blockchain “with a plan to reconstitute it”, causing Binance to stop the trading of LUNA pairs.
Despite still being significantly below its all-time high, Saturday’s surge has breathed some new air into LUNA. On Friday, Binance, the world’s largest crypto exchange by traded volume changed its mind and re-listed LUNA after the Terra team agreed to fire up block production on the Terra blockchain.
While some investors have flatly remained opportunistic hoping to make a killing off of LUNA’s bounce, others seem to have been stoked by Terraform Lab’s plan to revive the network. This has seen LUNA’s trading volume rise by over 1000% in the past 24 hours with traders now envisioning LUNA to pull off a SHIB-like rally.
Despite being “heartbroken” and “devastated by the UST de-pegging,” on May 14, Do Kwon, Terraform Labs co-founder denied rumors that Terra was involved in orchestrating the UST dump.
“Neither I nor any institution that I am affiliated with profited in any way from this incident.” Kwon Tweeted. “I sold no LUNA nor UST during the crisis”
“I still believe that decentralized economies deserve decentralized money-but it is clear that UST in its current form will not be that money,” Kwon added. The Terra team is currently working on a “Terra ecosystem revival plan”, that has obviously appeased a majority of Terra proponents, as can be seen in today’s spike.
As of writing, LUNA is trading at $0.00045, up 1,448.53% in the past day while UST is down to $0.19. The volatility on these assets is, however, “extreme” and investors should “proceed with caution.”