Terra’s LUNA seems to struggle as far as price performance is concerned. The bearishness that plagued the crypto market yesterday had LUNA plummeting, losing 8.91% to explore the $81.64 price level.
Furthermore, Terra’s market cap has declined by 29.60% over the past seven days. Should that worry market players?
BTC Buy Fails to Boost Investor Confidence?
LFG (Luna Foundation Guard) has been purchasing BTC lately. The foundation’s BTC address shows significant purchases between March 22 and March 25, scooping $BTC worth $125 million every day. It also bought 5,040 BTC on April 6 and 4,130 BTC on April 10.
On April 7, LFG announced its $100 million worth of AVAX tokens from Avalanche Foundation to boost its stablecoin reserve. LUNA price extends steady drops regardless of these massive announcements and purchases. For instance, the alt’s trading volume dropped by 14% over the past seven days.
LUNA’s price appreciated in February when the foundation revealed plans of selling Terra tokens to raise $1 billion and intentions to boost its reserves. For example, the Relative Strength index had crossed the neutral zone by February 27, dipping into the overbought level (the position it last overcame last December).
However, LUNA fulfilled expectations as it saw an almost instant push-back to the neutral 50. The RSI neared the neutral in April. And a day after the partnership announcement saw the Relative Strength Indicator beneath the neutral 50.
The drop in prices emerged as the markets went red last weekend amid a bearish reaction by most cryptos. The Relative Strength Index stood at 39.81 at this publication, approaching the oversold territory.
More Pain for the Alt?
Surprisingly, analysts noted a downside trend for LUNA after two threads on Twitter publication last weekend. A crypto fan twitted, questioning Terra’s ability to keep its UST peg. He claimed that TerraUSD does not have any tangible assets backing the stablecoin. @JackNiewold share the second thread. He accused Do Kwon of receiving LUNA coins meant to mint UST via burning. He added that Luna Foundation Guard used some of the burned token supply to purchase BTC.