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Bitcoin Dips 5%, LUNA Down 10%, Here’s What To Expect Next

With the weekend approaching, the larger crypto market once again started to look shaky. At press time Bitcoin’s price had dropped by 5.54% with BTC oscillating at $36,465.

Some of the worst affected in the top ten assets by market cap were Solana and Terra (LUNA) noting 12% and 10% price drop over the last 24-hours. 

Terra’s Sensitivity to BTC

For the most part of the new year, LUNA has remained relatively sensitive to Bitcoin’s price action. After making an all-time high of $102.63 on December 27, last year LUNA’s price failed to rally independently in the market.

That said, throughout the last month Terra saw two major price dips, one panned out for a week pulling the alt’s price by 28% while the other has been going for the last 15 days pulling LUNA down by 48%.

Source: FXEmpire

Furthermore, Terra’s Relative Strength Index was testing the lower under 30 level indicative of a rise in selling sentiment. Notably, Terra’s trajectory has been sensitive to BTC price action over the last month. While the alt replicated BTC flash crashes the occasional Bitcoin pumps couldn’t push LUNA’s price much. 

Why a Terra Recovery Could Take Time?

Terra is considered to be the second-largest smart contract platform after Ethereum and the platform enables users to trade Terra stablecoins like UST and others with ease. The network uses native currency LUNA to meet network fees, take part in the voting, in addition to stabilizing the price of Terra’s stablecoins.

Around January 29, Terra’s price tumbled again amid the Wonderland controversy. After the popular DeFi platform was caught in a scandal when one of its top executives was revealed in recent days to have been involved in the QuadrigaCX scam, one of the biggest ever crypto frauds. 

Furthermore, Terra’s TVL in DeFi had depreciated considerably over the last month. Its TVL stood at $13.15 billion noting an over 4% decrease over the last day. 

Source: DeFilama

While LUNA’s one-year ROI vs USD was a whopping 2165.36%, its three-month and one-month ROI was still negative which meant that short-term and mid-short-term HODLers weren’t making profits. So, seemingly with the total crypto market cap falling, looks like LUNA’s recovery took could take some time. 

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Bitcoin Dips 5%, LUNA Down 10%, Here’s What To Expect Next

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