Should i buy LUNA ? Coin dropped over 90%

Should i buy LUNA? You might have got to this article because of the 90% drop of the coin which is at the time of this article sitting at $3.80. This article will explain how this coin works. It will also tell you more about Terra Station, and its wallet.

Terra USD

While a Luna coin is a stablecoin, the UST is more volatile. It tracks the price of the US dollar and hovers around the $1 mark. The UST maintains its peg to the dollar through its use of the LUNA token. LUNA is a major contributor to the stability of the Terra stablecoins, as it helps to reduce market volatility. It also acts as a decentralized exchange that helps users buy and sell LUNA.

Terra LUNA

The Terra ecosystem relies on the demand for its coins, Luna in particular. If there is sufficient demand, the coins’ value will remain stable and its staking rewards will be stable. The coin’s demand also depends on the adoption rate of the Terra ecosystem as a whole. If the adoption rate drops below that threshold, the Terra ecosystem will be disrupted and the system will fall apart. It is for this reason that the Terra ecosystem relies on the demand of its coins, Luna in particular.

Terra Station

A point of sale payment integration is possible with the new Luna coin, and the platform can work on both desktop and mobile devices. Its integrated Terra protocol maintains the balance of fiat-based stablecoins by using algorithmic spending data and the LUNA token. Terra’s upcoming Terra DeFi service is a great opportunity for merchants, as it will give them a way to pay for their goods and services with crypto.

Terra Station wallet

When you first set up a Terra Station or Luna coin wallet, you’ll have to create a new account. You’ll be prompted to choose a password and seed phrase. You can choose to store your seed phrase offline or enter it into the wallet’s online interface. Once you’ve created an account, you’ll have to verify your seed phrase in order to transfer your funds. Once the account has been verified, the dashboard will appear.

Terra Station dashboard

In addition to the official Terra cryptocurrency wallet, LUNA holders can also stake their coins and participate in governance through the Terra Station. The dashboard can be accessed on desktop computers, mobile devices, and browser extensions. You can view on-chain data, compute the value of your coins, and stake LUNA to earn rewards. You can also participate in Terra governance by voting for proposals. Terra Station also provides a comprehensive guide on how to set up your account.

Should i buy LUNA? – the reasons for the LUNA drop

UST which is TERRA/LUNA’s dollar peg competitor to USDT has lost it’s peg with the dollar, losing 77.58% of the value and this in turn affected LUNA itself. Offloading off BTC collateral and high beta of the whole project have also been reasons behind the drop.

Terra has been acquiring treasury chests of Bitcoin to maintain the stability of its algorithmic stablecoin UST. Being exposed to BTC forced the algo to pump in more and more in order to maintain stability.

The Luna Foundation Guard deployed $1.5 billion in reserve assets to shore up UST’s peg. The whole point of maintaining a reserve of Bitcoin and other cryptocurrencies was for precisely this moment. But the solution hasn’t made a difference.

The problem of LUNA as we see it is the UST project which is backed by heavy Bitcoin reserves.

Should i buy LUNA ?- Technicals

Long red candles with immense amounts of volumes that denote the selling pressure behind the coin. Potential LP at $3.88 but by the look of the last daily candle we have not yet seen a sell apex.
Below the $3.88 there is nothing to stop the price technically, only some kind of news can revert the price.

Technicals act for less than 10% in this situation so you better start watching the #LUNA hashtag on twitter.

So what do we do ?
Must say that LUNA is cheap right now and that it is not a bad project all in all, it can still recover but you want to buy low not midway.
At this point we can not project to mid term trades as we still haven’t had a clear response plan from the founding team besides injecting more BTC into the algo… and BTC which is still unstable.

Possible short term entry with a really tight SL at around $3.50. Friendly suggestion to not trade LUNA in any leveraged exchange.