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    Terra back from the dead? LUNA price rises 300% in September

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    Terra back from the dead? LUNA price rises 300% in September

    Terra has become a controversial blockchain project after the collapse of its native token Terra (LUNA) and stablecoin TerraUSD (UST) in May. But, its recent gains are hard to ignore for cryptocurrency traders. 

    LUNA rising from the dead?

     LUNA’s performance in September is particularly interesting, given it has rallied by more than 300% month-to-date after a long period of sideways consolidation.

    LUNA/USDT daily price chart. Source: TradingView

    It is vital to note that LUNA also trades with the ticker LUNA2 across multiple exchanges.

    In detail, Terraform Labs, the firm behind the Terra project, divided the old chain into Terra Classic (LUNC) and Terra LUNA 2.0 (LUNA/LUNA2).

    Related: Do Kwon reportedly hires lawyers in S. Korea to prepare for Terra investigation

    Terra Classic is the original version of the Terra blockchain, while LUNA 2.0 was created as a part of a regeneration strategy by Terraform Labs founder Do Kwon. In doing so, Kwon and his team periodically airdrop the LUNA2 tokens to users affected by Terra’s collapse.

    LUNA/LUNA2 started pumping on Sept. 9, the day on which many things happened inside the Terra ecosystem.

    First, Luna Classic (LUNC) passed governance proposals to add a 1.2% tax on all its on-chain transactions on the day. In other words, the proposals will permanently remove 1.2% of the LUNC supply from each on-chain transaction, as Cointelegraph covered.

    Second, a self-proclaimed Terra whistleblower, FatMan, reported a suspicious transaction worth 435,000 LUNA2 tokens to Binance, alleging that the sender is TerraForm Labs:

    “Was eating lunch [and] saw LUNA2 pump. Checked the TFL Dawn wallet. Sure enough, after months of farming rewards with the airdrop they claim they never received, they sent all 435K available LUNA 2 to Binance just days ago. That’s just one address.”

    However, Do Kwon dismissed the allegations.

    The Sept. 9 pump also occurred a week after Terra passed the proposal to conduct its second airdrop of over 19 million LUNA tokens until Oct. 4.

    LUNA price technicals lean bearish

    From a technical perspective, LUNA’s price risks undergoing a massive correction in the coming days.

    Firstly, on the four-hour chart, the token’s relative strength index (RSI) has jumped above 70, which is considered overbought territory where a correction becomes more likely. Secondly, the price has been forming a rising wedge, or a bearish reversal pattern, since Sept. 9.

    LUNA/USDT daily price chart featuring rising wedge breakdown setup. Source: TradingView

    Notably, a rising wedge forms when the price trends higher inside an ascending range whose upper and lower trendlines converge toward one another. It resolves after the price breaks below the lower trendline together with a rise in trading volume.

    As of Sept. 11, LUNA was testing its wedge’s lower trendline for a potential breakdown move. In this case, the price will risk falling by as much as the wedge’s maximum height.

    In other words, LUNA could drop to $4.5, down 30% from the price on Sept. 11.

    The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.