Price Run Investigation

Beginning in the week hours of Monday, January 9 (ET), the price of LUNA skyrocketed, from $1.37 to a high of nearly $2 before settling down at roughly $1.60.

Identify some of the major reasons for this recent upshot in price, and back up your assertions with data. Why did the price jump so suddenly on Monday night? Will prices remain at, or above, current marks in the coming weeks or will it return to at or near $1? Why?

We are not looking for data on Terra Classic for this bounty. Please use the terra.core tables hosted on Flipside Crypto.

Introduction

The crypto industry continues to progress and its development has never stopped. Contributors of each blockchain keep developing each segment of the industry and the whole crypto ecosystem. While there were many red flags in Terra’s algorithmic stablecoin concept, not many investors truly anticipated the coin to lose its value entirely.

LUNA’s crash was largely caused by its link to TerraUSD (UST), an algorithmic stablecoin. While most stablecoins are pegged against a specific dollar value or equivalent currently reserved in centralised banks, the UST stablecoin maintained its value through algorithms and computer-generated codes.

The process of maintaining the $1 price equilibrium included burning and minting LUNA/UST to maintain the price of these tokens. However, during the bear market, a large amount of UST was dumped, causing the stablecoin to de-peg. This caused a ripple effect in an already downward market, driving more and more investors to sell and burn UST, thus minting more LUNA. This excessive mining led to a massive increase in LUNA’s circulating supply, thus crashing its price. The token’s circulating supply was around 345 million in April, which became 6.5 trillion on May 13th.

Following the massive crash, Terraform labs decided to revive the altcoin, but this time without any links to the algorithmic stablecoin. Developers launched a new Terra blockchain called Terra 2.0. The old Terra chain is renamed Terra Luna Classic. The new LUNA 2.0 has a total locked supply of 1.0 billion, which is significantly better than the 6.5 trillion supply of the classic token. 35% of the new tokens are airdropped to previous and existing LUNA holders. 10% of LUNA 2.0 is sent to those who held the token before the UST crash, and 25% is sent to those who still own LUNA Classic and UST. Another 30% is sent to a pool of LUNA investors Read More...

Method

In this dashboard used from crosschain.core.fact_hourly_prices table to track the price changes in LUNA 2.0 token.

The erra.core.ez_swaps table has used to find the swapping metrics of LUNA2.0 in two states.

> * Swap from/to LUNA2.0 as trading in total. > * Swaps axlUSDT or axlUSDC from/to LUNA2.0 as trading by Stablecoins.

'ibc/B3504E092456BA618CC28AC671A71FB08C6CA0FD0BE7C8A5B5A3E2DD933CC9E4' --axlUSDT
'ibc/D189335C6E4A68B513C10AB227BF1C1D38C746766278BA3EEB4FB14124F1D858' --axlUSDC

Also look at the terra.core.ez_transfers table to track the transfer inflow/outflow of Stablecpins (axlUSDT or axlUSDC).

The evaluation of metrics have done in two period time:

> * First: since 2023 to date by day > * second: over the January 9th, by hour.

Analysis

✍🏻 Conclusion

As of Findings above:

I think nobody can’t say exactly what happen in the future of markets, even one minute later, but we can put some signs alongside together and get some signals to predict the probability of future trends of market.

The Terra blockchain's hourly LUNA price, daily user activity, smart contract activity, and DEX activity are all analyzed in detail here on this dashboard. According to the numbers, the number of daily LUNA traders, the amount of LUNA traded on DEXs, and the number of Terra blockchain users have all increased since the beginning of the year. A rising number of LUNA's regular users tends to drive up the cost of the service. Yet external market conditions, news, and general crypto market mood can all affect these trends and patterns. The dashboard also includes suggestions for expanding Terra blockchain smart contract usage and production. It's helpful for keeping tabs on LUNA's price and activity on the Terra blockchain, as well as learning more about the factors that affect them.

Additionally, In my opinion and based on current dashboards findings if only see the LUNA market and assessed it individually, can be said the LUNA price will decrease, but if we look that that as a piece of a larger puzzle can be seen the whole condition of crypto market are on short term upward trend, so can be expected the LUNA follow the market, too.

Hey there 👋!

Firstly, I appreciate you sticking with it until the conclusion.

I'm Hamed, a civil engineering Ph.D.

student interested in data analysis.

I've made many similar dashboards and visualizations since I started at Flipside in January.

Please take a look at my various contact details and let me know what you think.

About:

• Author: HaM☰d

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• Discord: 0xHaM☰d#8391

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• Twitter: @arjmandi_hamed

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• Email: h_arjmandi2012@yahoo.com

:hourglass_flowing_sand: Luna Price

• The chart left shows the closing price of LUNA, 7 & 21 day moving averages.
• After Jan 6th, when the MA7 crossed and passed the MA21, the the price fell a little to kiss the MA7 and say goodbye, and flying up from $1.3 to $1.55 (16% jump) in Jan 9 & 10th.
• The 7 & 21-day moving average follow the price and going up.

:mag_right: Findings

• Swaps transactions and swappers count increased since 2023, but overall selling transactions and seller count are higher than buying metrics.
• In terms of trading volume in $USD spiked in Jan 3 and 6th and peaked at $400M in Jan 11th.
• A total of $522.8M $USD of LUNA was bought in net state.
• If we are to look in terms of $LUNA amount, we see 738.8M $LUNA bought.

In the other hand if we look at the following graphs can we observed that the larger volume of stablecoins has deposited to LUNA, while a lower volume has withdrawn.

:hourglass_flowing_sand: Trading Luna2.0 by Stablecoins

:mag_right: Findings

In terms of swapping To/From stablecoins can be seen, $3.74M LUNA bought, and $40.7M sold out from and to stabalecoins, respectively.

Overall, the most of traders tends to sold their LUNA to stablecoins rather than buying that.

:hourglass_flowing_sand: Assess the Above Metrics in January 9th, by Hour

:mag_right: Findings

The skyrocket of price in Jan 9th took place between 16 pm till 17 and dropped immediately to 1.48 in 20 pm.

The following visuals represent the LUNA trading in Jan 9th, that followed by inflow/outflow of stablecoins to LUNA.

As can be seen the all swap metrics have experienced high volatile time period between 16 till 18 pm.

:mag_right: Findings

• The following charts show the count of trading LUNA by stablecoins transactions peaked at over 700 (Buying + selling) at 17 pm.
• Also the most traded volume swapped in 17 pm with over $224K buying and $166K selling LUNA2.0.
• Overall, the net traded volume in Jan 9th was the selling $272K of LUNA.

:hourglass_flowing_sand: Trading Luna2.0 in Total State

:hourglass_flowing_sand: Swaps of LUNA pairs Performance in 7, 14, 30 & 90 days Periods

:mag_right: Findings

This section has deals with LUNA token swapping performance.

I tried to track the swaps metrics in time period of between current date and 7, 14, 30 & 90 days ago to find what top 10 pairs have had the most traded volume, transactions and trader count.

As can be seen among of top 10 pairs, the LUNA has swapped to other tokens and not any swapped transaction execute to buying LUNA from other tokens.

I excluded LUNAC(Luna Classics) from query to have a distributed data because of when Included it, more than 99% of volume has allocated to it and other pairs disappear and can’t have a appropriate vision of data.