Bitcoin
BTC$22 729.54

-4.30%

Ethereum
ETH$1 560.97

-4.92%

Tether
USDT$1.000083

0%

Binance Coin
BNB$305.42

-3.96%

USD Coin
USDC$0.999972

0%

XRP
XRP$0.392690

-4.91%

Why Terra (LUNA) price hit a new all-time high


07 Oct 2021

#Terra

The successful launch of the long-awaited Columbus-5 upgrade is just one of the factors in LUNA’s ascension to a new record high. Protocol upgrades are one of the biggest drivers of momentum because they show developers' dedication to fixing bugs, incorporating user requests and adding new features that make the protocol competitive and shore up the token's value. One project that has seen its token price rally to a new all-time high following the launch of a highly anticipated upgrade is Terra (LUNA), a blockchain protocol that uses fiat-pegged stablecoins like TerrUSD (UST) to create a global payments system.

Data from Cointelegraph Markets Pro and TradingView shows that after hitting a low of $23.81 on Sept. 21, the price of LUNA surged 108% to establish a new record high at $49.55 on Oct. 4 as its 24-hour trading volume spiked to $2.5 billion.

Three reasons for the price breakout in LUNA include the launch of its Columbus-5 upgrade which introduced a LUNA burning mechanism, the protocol’s adoption of the IBC standard which opens Terra to the Cosmos ecosystem and an increase in DeFi applications and total value locked on the protocol. 

Columbus-5 arrives

Columbus-5 launched on Sept. 30 and according to Terra developers and independent analysts, the upgrade is the most significant development to happen to the protocol to date. One of the notable changes to come along with the upgrade was a modification to the project’s tokenomic model which leads to all LUNA used to mint UST being burned, instead of going into the community pool.

According to data from Terra, there were $832 million worth of LUNA burned in the genesis block of Columbus-5. This change has introduced deflationary pressure to the LUNA supply and it could help boost its price in the long term as demand for UST grows.

Inter-Blockchain Communication standard

A second reason for the boost in LUNA's momentum was its integration with the Inter-Blockchain Communication (IBC) standard which allows the Terra network to communicate and interact with protocols in the Cosmos ecosystem. This integration opens up Terra and its UST stablecoin to more widespread adoption throughout the Cosmos ecosystem and make it the stablecoin of choice for applications and chains in the network.

With a larger pool of projects now having access to UST, this could lead to a further deflation in the supply of LUNA becaus more will need to be burned in the process of minting new UST.

The total value locked in the Terra ecosystem is surging

A third reason for the bullish price moves in LUNA has been the network's growing ecosystem of decentralized finance (DeFi) protocols that have helped push the total value locked on the protocol to a new all-time high. According to data from Defi Llama, the total value of assets locked on the Terra network reached a record $10.07 billion on Oct. 4 right as LUNA price was breaking out to a new record high.

Currently, Terra's TVL is above $10 billion and the top-ranked platform in terms of TVL is Ancor Protocol (ANC) with $3.86 billion. ANC is the main avenue for minting UST by pledging LUNA or Ether (ETH) as collateral.

Other notable DeFi protocols on the network include Lido (LDO), which has a TVL of $3 billion, Mirror (MIR) with a TVL of $1.38 billion and Terraswap which has a $1.32 billion TVL. VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for LUNA on Sept. 26, prior to the recent price rise. The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity. VORTECS™ Score for LUNA began to pick up on Sept. 21 and reached a high of 73 around one hour before the price began to increase 108% over the next two weeks.


Related

Terra (LUNA) trading volume surge 200% as market adjusts to death spiral
Terra (LUNA) trading volume surge 200% as market adjusts to death spiral
Key metrics signal Terra (LUNA) price is preparing for a recovery
Key metrics signal Terra (LUNA) price is preparing for a recovery
Reasons why Terra (LUNA) price rallied by 20%
Reasons why Terra (LUNA) price rallied by 20%

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 61.2% 78 $22 729.54 -4.30% -0.91% $438 166 694 164 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 62.4% 80 $1 560.97 -4.92% -4.16% $191 022 338 021 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 91.2% 1 $1.000083 0% -0.01% $67 781 650 084 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 68.8% 59 $305.42 -3.96% -0.18% $48 226 570 306 BNB 7 days price change
5 USD Coin (USDC) USDC USD Coin predictions 94% 1 $0.999972 0% -0.01% $42 707 214 114 USDC 7 days price change
6 XRP (XRP) XRP XRP predictions 66.8% 65 $0.392690 -4.91% -7.98% $19 950 057 993 XRP 7 days price change
7 Binance USD (BUSD) BUSD Binance USD predictions 91.6% 1 $0.999844 -0.04% -0.03% $15 729 733 089 BUSD 7 days price change
8 Cardano (ADA) ADA Cardano predictions 67.6% 70 $0.370821 -6.20% -1.49% $12 828 075 578 ADA 7 days price change
9 Dogecoin (DOGE) DOGE Dogecoin predictions 67.6% 61 $0.086818 -3.52% -1.88% $11 518 194 850 DOGE 7 days price change
10 Lido stETH (STETH) STETH Lido stETH predictions 91.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
11 Polygon (MATIC) MATIC Polygon predictions 65.2% 71 $1.074457 -8.22% 7.81% $9 384 646 732 MATIC 7 days price change
12 Solana (SOL) SOL Solana predictions 59.6% 91 $23.73 -9.58% -2.65% $8 821 093 670 SOL 7 days price change
13 Polkadot (DOT) DOT Polkadot predictions 64.8% 78 $6.17 -6.72% -7.56% $7 107 936 803 DOT 7 days price change
14 Litecoin (LTC) LTC Litecoin predictions 71.2% 54 $90.43 -5.91% 0.15% $6 526 737 028 LTC 7 days price change
15 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 68% 69 $0.062057 -2.67% -0.98% $6 309 701 687 WTRX 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2023 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.