Altcoins

Terra [LUNA] has had a good run this week but will it continue

The DeFi chain, Terra, had a great run these final two days, with its stablecoin UST flipping BUSD to realize the place of the third largest stablecoin. It additionally achieved the milestone of turning into the primary decentralized stablecoin to achieve the highest three.

Terra leaves a mark, however…

…as UST adoption grew, its focus within the Wormhole has utterly vanished from the meager 3% in January. Uniswap V2, which had the very best focus till November, at present holds about 11.9% of the UST, whereas one other 4% of the UST is in Curve. The remaining 84% is at present in different unspecified locations.

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Terra UST distribution | Supply: Dune – AMBCrypto

No matter its location, UST transfers have been rising steadily, with each day transaction volumes ranging between $200 to $400 million UST. At one level in January, quantity spiked to $5.3 billion.

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Screenshot 2022 04 20 172549

Terra UST transaction volumes | Supply: Dune – AMBCrypto

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And over the months, this development helped UST attain the quantity three spot. In doing so, UST additionally flipped the situation of Terra’s native token LUNA from being the worst performer of the week to one of the best performer this week.

Up by 23.52%, LUNA gained again a lot of the 35.43% loss witnessed this month however nonetheless stays 25% away from marking a brand new ATH.

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LUNA value motion | Supply: TradingView – AMBCrypto

Nonetheless, ought to this momentum proceed, it gained’t be too troublesome since value indicators are already supporting a bullish narrative at present. MACD is exhibiting the possibilities of a bullish crossover within the subsequent 24 hours, and RSI jumped again into the bullish zone inside 48 hours.

However not solely is it doing properly on the funding entrance, however its efficiency within the DeFi house has additionally been no much less vital.

Terra’s TVL jumped $3 billion throughout the final two days, out of which $2 billion got here from the second largest dApp on this planet, LIDO, pushing it additional nearer to toppling Curve out of its primary spot.

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Lido Finance TVL | Supply: DeFi Llama – AMBCrypto

Though as all the time, spiking costs additionally spike the dangers related to the asset, and that’s the case proper now. LUNA’s risk-adjusted returns are horrible at present, and to make issues worse for traders, its volatility has shot up by 117% during the last seven days, making it weak to a value drop as acute as the value rise.

Screenshot 2022 04 20 172432

Terra Volatility | Supply: LunarCrush

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