LUNA Price Decline Wipes out the Recent Gains. Is Another Downtrend on the Way?

The crypto markets appear to have been swinging off-let as the bulls & bears try to establish their dominance. Considering the Terra(LUNA) price action, the upcoming trend appears to be largely vague. As the asset has been testing multiple patterns but failing to accomplish them. 

At its current price of $2.70, Terra has seen trades worth a total of $231,632,690 in the previous day. It decreased by 4.27% over the last 24 hours. With 127,475,474 LUNA in circulation, it has a market capitalization of $344,123,602.

After failing, Terra, once the second-largest Defi network in the world, rattled the cryptocurrency market. Despite being resurrected since then, Terra LUNA 2.0 has been unable to reclaim even a small portion of the market it previously controlled.

Terra LUNA breakdown

Over the span of three days, LUNA rose by 230%. It started to fall, and within ten days, the price of LUNA dropped from $6 to $2.7, representing a total reduction of 54.41%, wiping out a majority of the surge witnessed around the middle of September.

Due to the dominance of the bears and the price’s apparent decline, which indicates selling pressure, the past two months have been exceedingly bearish for LUNA. The volume also decreased along with the price loss, which led to less trading and, in turn, a reduction in volatility. The general state causes the price to stay the same.

The price swings persisted, and in the second week of September, there was a significant price increase that raised both the volume and the volatility. However, the bears took control once more as prices continued to fall, which led to a drop in volume and an acute tightening of volatility.

Factors responsible for Terra LUNA’s decline

1. Following Do Kwon’s unwillingness to assist with the investigation into the collapse of the Terra ecosystem, South Korean officials recently asked Interpol to issue a red alert on him.

2. Extreme fear: The second, most important reason that has driven the cryptocurrency market for over a month now is “extreme fear.”

Since the Crypto Fear and Greed Index has been at 23, which indicates extreme fear, the market emotions are exceedingly bearish. Investors are uncertain about the market’s future path because attempts to break out of this zone have been ineffective. LUNA is projected to rise once again as a result of this Fear’s impact on the overall market.