Terra LUNA price has collapsed as hopes of a successful turnaround fade. The Terra 2.0 coin crashed to a low of $1.5351, which was the lowest level since July 13 of this year. It has crashed by about 98% from its all-time high. According to CoinGecko, its market cap has dropped to about $236 million. At its peak, the original LUNA was valued at over $40 billion.
Why is Terra struggling?
Terra 2.0 is a relatively new blockchain project that replaced the original Terra that collapsed in May this year. It is a smart contract platform that hopes to be a useful place for developers to build decentralized applications in industries like finance. Terra is built on top of the Cosmos SDK and Tendermint Consensus. The original Terra is now known as Terra Classic, while its coin is known as LUNC.
Terra LUNA price has dropped sharply in the past few weeks for two main reasons. First, this decline is in line with the recent decline of other cryptocurrencies like BTC and ETH. Historically, cryptocurrencies tend to move in sync with each other.
Terra has also struggled because of the relatively low demand for the coin. Most investors who lost money when the original LUNA collapsed have stayed away from Luna. This explains why volume has dropped substantially. The same is true with developers. Most developers have shifted to other platforms like Polygon and Ethereum.
Terra LUNA price prediction
The daily chart shows that the LUNA price has moved sideways in the past few days. This price is still substantially above the year-to-date low of $0.001. It has moved along the 25-day and 50-day moving averages while the Stochastic Oscillator has moved to the oversold level.
Therefore, I suspect that the coin will remain in this range for a while and then have a bearish breakout as its demand wanes. If this happens, the next key level to watch will be at $0.87, which is about 50% below the current level. A move above the resistance at $2 will invalidate the bearish view.
