Can LUNA Recover to Previous Highs Following Historic Crash?
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 minutes to learn more
Free Crypto Signals Channel
Free Telegram Channel
Terraform Labs was forced to halt Terra blockchain after the historic crash but might have done so a little too late. The recent UST crash triggered hyperinflation in LUNA, which caused the total supply of tokens to rise dramatically from 350 million to a whopping 6.5 trillion or 18,571x.
The crash was exacerbated earlier on with LUNA investors dumping tokens at an alarming rate, which resulted in the cryptocurrency crashing by 99%. Terra later crashed by another 99% to $0.1, and two more 99% declines, falling to a historic low of $0.00000112 against Binance USD (BUSD). This crash was worsened by another crash in Bitcoin and the stock market.
Recovery Above $1 Mathematically Impossible for LUNA, Except…
The main question on the lips of many is: “can LUNA recover from this to its previous highs of over $100?” For this to happen, a massive burn of LUNA tokens needs to occur; the 6.5 trillion tokens in circulation need to be cut to somewhere near 350 million. However, this is no easy task.
Already, the Terra team appears to be leaning towards a much easier recovery option, forking.
In a sense, LUNA, with its current supply standing, returning to just $1 is mathematically impossible. A rise to $1 with its current supply of 6.5 trillion would give Terra a valuation of $6.5 trillion. At its peak in November 2021, the entire crypto market had a valuation of $3 trillion.
At its current state, the best LUNA can do is return to its pre-crash valuation of $40 billion, which would give each token a value of $0.00615.
With this explanation, you begin to see the improbability of LUNA returning above $1 if the Terra team refuses to burn a massive amount of supply.
You can purchase Lucky Block here. Buy LBlock
