Luna is the Terra platform’s reserve currency, serving three primary functions: facilitating Terra transactions through staking, ensuring the price stability of Terra stablecoins, and providing incentives to the platform’s blockchain validators.
The Terra protocol is built on a Proof of Stake (PoS) blockchain, which requires miners to stake their Luna to mine transactions. All else being equal, a validator who staked more Luna has a better chance of generating the next Terra block than a validator who staked less. Luna, in essence, represents the mining power of a validator. However, by providing network security and validation, Luna holders and stakeholders are exposed to the asset’s price risks. This is due to the Terra protocol’s ability to easily exchange Terra stablecoins for Luna at their predetermined exchange rate in order to maintain the peg. It will sell stablecoins for Luna when demand is high and prices are above the peg. Let us review LUNA price
LUNA Price Prediction
Bullish Scenario: If LUNA manages to break above the resistance level at $98.52 then it would be bullish. If it gains some momentum and buying pressure builds up then we might test the next resistance level at $103.68. Breaking above the $103.68 price level with significant buying volume will lead to a good chance of crossing above $113.85 hence making a new all time high(ATH).
Bearish Scenario: LUNA has been in a uptrend channel since the last few weeks. But If the support level $87.09 doesn’t hold then it will hit $79.60, $65.21 and below sooner or later.
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