LUNA’s Recent Social Dominance Hints at an Incoming Turnaround After 3-Month Drop
According to Santiment, LUNA is on the cusp of a turnaround, judging by the amount of conversation around it. LUNA is currently seeing the highest percentage of discussion since October last year.
Crypto Market Affected by Selling Pressure
LUNA’s presence among the chattering circles has been on a downward trend in the last few months. Since the beginning of the year, the token has been trading downwards and even experienced a 30-day low on the last day of January when it sold for $43.57. However, this retracement is not unique to LUNA alone.
2022 has so far been a challenging year for the wider crypto market, with many of the leading digital assets, including Bitcoin and Ethereum, facing similar selling pressure. LUNA is currently priced at $58.98, a far cry from its all-time high of $103, reached on December 27th, 2021.
But a massive social dominance spike like the one being reported by Santiment amid a very negative outlook from traders, more often than not, signifies that a crypto’s price will soon turn positive. Tokens being discussed at a higher rate than normal are usually the most likely to have their price trajectories change. Social dominance spikes like the one being witnessed in LUNA are usually triggered by the fear of missing out (FOMO) among investors.
2021 Was a Good Year for LUNA
In 2021, LUNA added more than 13,000% to its value. The token started the year trading at $0.65 but ended on an impressive high, hovering just above the $80 mark. This bullish run was fueled by the increased adoption of decentralized finance (DeFi) protocols on the Terra network.
By the close of last year, Terra had become home to leading DeFi projects such as Anchor, Lido, Stader, Terraswap, and Astroport. The platform’s total locked value (TVL) stands just north of $15 billion, a feat which has allowed its native token, LUNA, to overtake the likes of Shiba Inu and become the ninth biggest cryptocurrency in the world by market capitalization. With 18 protocols in its ecosystem, Terra is also the second most valuable DeFi blockchain after Ethereum and ahead of Binance, Avalanche, and Fantom.
Potential Price Drivers for LUNA
Since mid-last year, the Terra network has achieved a number of developments and milestones that could play significant roles in the imminent recovery of the LUNA token price.
Chief among these developments is Terra’s new partnership with Hummingbot, which will provide an automated market maker arbitrage facility to the Terra community. An automated market maker tool enables decentralized exchange users to swap digital assets without the need for intermediaries. In their new partnership, Terra and Hummingbot will develop an arbitrage bot with the ability to conduct trades between Terraswap and other decentralized crypto exchanges.
Another development that could have a significant bearing on the price of LUNA going forward, is the decision by the Singapore-based crypto exchange Crypto.com to integrate the Terra blockchain’s RSS feed into its LUNA price page. This move makes it easier for Crypto.com users to get the latest news and updates regarding Terra products and services.
