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Why is LUNA Pumping – LUNA Price Up 1000%

Why is LUNA Pumping – LUNA Price Up 1000%

LUNA pumping

The LUNA price has now hit the $0.0003 – $0.0005 levels, an over 1000% pump in 24 hours.

The current 2022 Terra (LUNA) price low was $0.00000112, on the LUNA/BUSD pair, which was hit after Binance delisted the LUNA/USDT trading pair and all futures trading pairs.

Binance has resumed spot trading for LUNA and risk warning messages are displayed on the exchange.

Other crypto platforms are yet to relist LUNA, leading to an increase in trading volume on Binance with investors buying stablecoin BUSD (Binance USD) to then buy LUNA with.

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

Why is LUNA Pumping Now

Some investors will be FOMO’ing in to an asset with such a high 24 hour change percentage in the green, however that is still small relative to how low Terra LUNA crashed in May.

At one point the LUNA price pump was +2000%, hitting a current intraday high of $0.000595, then quickly retraced over 50% of that move before bouncing.

Many buyers that entered too early during the LUNA drop will be looking to exit their position at break even and ‘dump their bags’ – market conditions are still volatile, especially with Bitcoin moving back below $30,000 after a short-lived recovery over $30,500.

LUNA pump risk warning

LUNA 24 hour trading volume on Binance

The current 24 hour LUNA trading volume on Binance is about to break 450 billion BUSD.

One reason for the LUNA pump could be it is now more difficult to short LUNA as margin trading (perpetual futures) was suspended by crypto exchanges and not yet relisted, including by Binance Futures and derivatives platforms FTX and Crypto.com.

The absence of shorting makes it easier for LUNA to go up in value as short positions borrow large amounts of an asset in order to then short sell it at a given price.

Another possible reason why LUNA is pumping is CEO of Terraform Labs Do Kwon finally broke his long silence to update investors and announce what action Terra is taking to recover LUNA, including their latest UST recovery plan (TerraUSD).

The cryptocurrency markets also have much lower liquidity on weekends when legacy markets are closed, leading to more crypto price volatility in either direction – meaning large wicks to the upside and downside. At one point the LUNA price wicked to 0.002 BUSD, after a large market buy.

It has also simply experienced one of the largest crypto crashes in history already, from $119.55 to $0.00000112, making history and being oversold.

Other Exchanges Yet to Relist LUNA

The move to relist LUNA by Binance on May 13th has been met with some criticism as other crypto platforms such as eToro – which delisted LUNA 15 hours before Binance – have not yet considered it safe to be relisted.

When eToro delisted LUNA – 8840x higher than the low, and 34x above the LUNA price now

That quick decision by eToro protected buyers from another 99% crash (and then another 90% drop on top of that). Before that it was already down 99.16% on the day, and 99% shortly before that, leading some traders to rush to buy LUNA at a discount as it was once a top 10 coin (now #206).

Unlike normal altcoin crashes however LUNA was facing hyper inflation of its circulating supply to 6.5 trillion from 380 million, which beginner investors would not have been aware of, and few crypto exchanges warned people about. This wasn’t comparable to the March 2020 covid crash.

Binance USD

The market cap of Binance’s stable coin BUSD has increased over 2% in the past 24 hours to $17.5 billion, cementing its position as the #7 largest cryptocurrency by market capitalization. A further 10% increase would flip Ripple’s market cap and knock XRP off the #6 spot.

Binance’s native token Binance Coin (BNB) also holds the #5 spot. The early relisting of LUNA benefits Binance as many traders still want to buy LUNA despite the risks.

It presents an interesting ethics debate – should exchanges tell people what not to buy, or give them 100% freedom to make mistakes during black swan events and network exploits that the average retail investor might not understand.

CZ Binance (CEO Changpeng Zhao) did tweet criticism of how the Terra crash was managed.

Should I Buy LUNA?

Terra Labs will need to burn a large amount of the LUNA supply in circulation to keep LUNA pumping – with a 6.5 trillion circulating supply and 6.9 trillion total supply, LUNA would flip Bitcoin’s market cap ($550 billion) before it even hit nine cents, $0.09.

You could consider opening an eToro account and only buying LUNA when that platform considers it safe to do so. That would likely lead to increase in the price as eToro has 27 million users, is more regulated than Binance and is open to the United States.

There are limited options to buy LUNA in the US as Coinbase has only listed wrapped LUNA (WLUNA).

Currently over 100,000 eToro users are following the LUNA price action, with most on the sidelines watching the LUNA price action for the best time to invest when trading resumes.

Crypto News

Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.

The post Why is LUNA Pumping – LUNA Price Up 1000% appeared first on Business 2 Community.

Source: Business 2 Community