3 reasons why Terra (LUNA) price rallied by 20%

3 reasons why Terra (LUNA) price rallied by 20%

Altcoins continue to move higher while the price of Bitcoin (BTC) remains trapped in the $31,000 to $36,000 price range. 

The predictable range appears to be helping Terra (LUNA), a blockchain protocol that specializes in fiat-pegged stablecoins like TerraUSD (UST) to power a price-stable global payment system.

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3 reasons why Terra (LUNA) price rallied by 20%
LUNA/USDT 1-day chart. Source: TradingView

A quick scroll through the project’s Twitter feed indicates that the team behind LUNA has been busy as the month of June was full of protocol upgrades as well as new partnerships and integrations.

Some of the major developments for the Terra ecosystem include the launch of Mirror V2, the addition of Terra farming opportunities on Dfyn and the listing of LUNA on the Crypto.com exchange.

Support from Terraform Labs provides a boost

Price action for Terra received a boost on July 7 after Terraform Labs (TFL), the company behind the Terra blockchain, committed to using 50 million Terra SDT (SDT) worth roughly 70 million UST from the TFL stability reserve fund to capitalize the yield reserve for Anchor protocol (ANC).

This was done in order to provide enough time to introduce more types of collateral and self-sustainable protocol improvements that are due to be released in the coming weeks as part of Anchor V2.

The move will also help keep the rate offered to UST stakers on the Anchor protocol at 20%.

Partnerships highlight stablecoin demand

Another possible source for the current bullish momentum came after the team announced a full-stack partnership with Harmony (ONE) protocol that will enable the migration of UST to the Harmony ecosystem.

This partnership highlights the growing demand for reliable and secure stablecoins that are capable of operating across multiple blockchain networks to help conduct operations and facilitate ecosystem expansion.

Related: Altcoin Roundup: Stablecoin pools could be the next frontier for DeFi

Cointelegraph Markets Pro signals that something is brewing

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for LUNA on July 3, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

3 reasons why Terra (LUNA) price rallied by 20%
VORTECS™ Score (green) vs. LUNA price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for LUNA began to climb into the green zone on July 3 and registered a high of 75 on July 4, around 35 hours before its price began to increase 36% over the next two days.

The rising interest in integrating with the Terra ecosystem is a recent example of the growing significance that stablecoins play in the wider cryptocurrency ecosystem, a trend that continues to grow stronger as new participants enter the crypto space.

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.

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