The Terra price recovery has hit a barrier as investors question the overall bullish trend of most digital currencies. LUNA, Terra’s native token, is trading at $41.58, which is about 6% below the intraday high of $44.10. Still, this price is about 20% above the lowest level this week.
LUNA fundamental analysis
Terra has had a spectacular rally in the past few months. This growth has pushed LUNA to become the 11th biggest blockchain project in the world. It is even bigger than other well-known projects like Litecoin, Bitcoin Cash, Polygon, and Stellar. Its stablecoin, known as UST, has a market cap of more than $2.7 billion.
This growth has been driven by the Decentralized Finance (DeFi) sector and the recent upgrade to the protocol. Today, data compiled by DeFi Llama shows that Terra has about 8 DeFi projects that have a total value locked (TVL) of $9.75 billion. This makes it bigger than Avalanche, whose DeFi projects have a TVL of about $7.45 billion.
The LUNA price has also rallied because of the recent Columbus-5 upgrade. This upgrade introduced the concept of burning. This means that the LUNA that is used to keep the UST peg is currently completely burned. Another important part of the upgrade was the fact that it integrated the Inter-Blockchain Communication (IBC) protocol of Cosmos. As such, Terra is now compatible with hundreds of apps that are in the Cosmos ecosystem.
Terra price prediction
The daily chart shows that the LUNA price has been in a strong bullish trend for months. The price has jumped by more than 965% from its lowest level on May 23rd. This makes it one of the best performing cryptocurrencies in this period.
Terra has also moved above the 25-day and 50-day moving averages (MA) while the MACD has formed a bearish divergence pattern. The price also seems like it has formed an ascending triangle pattern.
Therefore, while the bearish divergence is worrying, the ascending triangle pattern could prevail. As such, the bullish breakout pattern will be confirmed when the price moves above the upper part of the triangle at around $45.