Terra (LUNA), a blockchain used to launch algorithmic stablecoins, is currently among the top DeFi platforms when it comes to the total value locked in circulation. LUNA has been in an uptrend for the past few days, but gained even more momentum in the previous 48 hours. LUNA was among the top earners of the past week, closing with a 40% increase.
Is it time to buy for Terra?
The news that the Luna Foundation Guard (LFG) has created a reserve in Bitcoin caused the markets to react positively. This will serve as an extra layer of stability and security for Terra USD, which is currently struggling with sharp price fluctuations due to the low liquidity situation in the exchanges. LFG has announced that it will invest $1 billion to build Bitcoin reserves. The US Treasury’s latest move to create a Bitcoin reserve has been met with criticism from analysts and experts.
As a result, this new development could reduce price fluctuations for the UST. UST is a stablecoin pegged to the US dollar through an algorithm. Unlike other centralized cryptocurrencies, it is not backed by anything but Luna. UST can be exchanged for LUNA if prices fall below $1 per token. Burning more Lunas means higher prices because there will be less total supply going into circulation. Terra’s introduction of a Bitcoin reserve can be seen as the next important step in reducing volatility in its ecosystem.
Does it make sense to buy the LUNA now?
The price of LUNA has been in an uptrend recently and was trading at $74.34 on February 26, 2022. Cryptocurrency has increased by 13% in 24 hours. LUNA is currently trading just below the $77.17 weekly support level, in a strong uptrend since Feb. 24. According to analyst Dan B, it may be time to buy more shares before they rise in future updates. Buy volumes increase if you want to invest in crypto. Analyst thinks LUNA is a good investment. The altcoin is pushing the latest resistance levels with ease. In fact, it could test prices above $90 before the end of February. If LUNA turns bearish, investors should look below $65 as support, which could signal an upcoming downtrend may be imminent.