LUNA’s cost went up 600% for a moment

Despite the fact that investing in digital assets has been a rather risky move lately, supporters of the Terra ecosystem continue to actively participate in the trades.

“Crazy” volatility LUNA has concentrated a huge number of traders near it, opening short-term orders in order to “make a quick buck.” The actions of users, even given the volatility on the market, are quite justified, because the way the cryptocurrency value behaves cannot but attract. For example, after falling steadily for a long time, LUNA token increased in price by 600% the other day.

When the leading cryptocurrency, bitcoin, began to plummet, many other digital assets also went down. Among the coins that even the most avid traders lost faith in was LUNA. It took just 7 days for the token to bankrupt a huge number of users. It all started on May 5, when the value of the cryptocurrency, along with its other “counterparts”, began to fall bit by bit. Such changes in the price chart were initially perceived by traders without much panic, betting on the coin’s speedy recovery. Despite all the hopes assigned to LUNA, already on May 12 the asset fell to $0, having fallen by $85 just for a week.

LUNA ecosystem was immediately discussed by the experts, who began to put forward their own reasons and share their forecasts about the future of the coin. As for the reasons, analysts attributed the fall of the asset to the abolition of the binding of USD to LUNA. As a matter of fact, this is the reason why the trading volume fell to the historical minimum – down to $178.6. By the way, the last time this indicator was recorded by CoinGecko service in February 2021.

After the price collapse, many LUNA supporters “showered” the cryptocurrency developers with a host of complaints. For example, the head and founder of Terraform Labs Do Kwon found himself in a very difficult situation, so he himself started talking about repayment, both in tokens and fiat currency – USD. The man stressed that all LUNA holders will be compensated for holding the coin at the time of its collapse, but only if his plan to restore the cryptocurrency does not work.

And while one part of users are looking for ways to at least cover their losses, another part of traders are trying to actively capitalize on LUNA’s decline by buying the depreciating asset en masse. Due to the opening of short-term positions, the trading volume of LUNA coins increased sharply, by 200%, reaching a record figure of $6 billion. It is noteworthy that before the “collapse of LUNA”, based on average figures, the trading volume never exceeded $2 billion. Thus, the temporary collapse of the ecosystem not only allowed to attract new users to the ecosystem, but also increased its capitalization directly.

As for the rise in the value of the coin itself, it was also the result of extraordinary activity on the LUNA Network. The other day, the asset soared 600%, allowing disillusioned users of the cryptocurrency to sell it at a relatively good price.

To conclude, according to analytical service CoinMarketCap, the cryptocurrency exchange Binance (68.26%) accounted for the largest trading volume involving LUNA, followed by trading platform KuCoin (9.52%), with FTX in third place at 1.13%.

As a reminder, we previously reported that Terra developers once again made a large purchase of bitcoin worth $100 million.