Analysis

LUNA sinks as anchor log turns bullish

Blockchain Terra recently contributed approximately $450 million worth of UST to its Anchor Reserve Yield Fund via the Luna Foundation Guard to expand the reserve over the next 12 months.

LUNA brought many positive signals from this event. In reality, however, the price has been moving in line with broader market signals.

LUNA falls into a downtrend

Unlike most altcoins and Bitcoin, LUNA actually had a pretty good December. While the rest of the market went into an accumulation trend, LUNA surged 158.37% to mark an ATH at $99.6, just below the $100 level.

Since then, however, the price is down almost 50% and it is currently trading around the $51.44 region.

 Source: TradingView

Despite the fact that a few days ago the fourth largest cryptocurrency exchange in the world, Kraken, listed TerraUSD (UST), the price of this altcoin continued its downward movement, losing 2.2% of its price in the last 7 days.

The price drop has seen the altcoin’s volatility surge by 20.2% over the past week.

Source: LunarCrush

Another factor driving LUNA’s price down is the slowdown in on-chain development activity, adding to the negative sentiment in the community.

But even if LUNA loses, Terra is still a blockchain with a pretty good return on investment. Investments in the Anchor protocol have grown rapidly since the beginning of this year, making Anchor the only lending protocol that continues to deliver returns of 19-20% on deposits.

This has increased the total value of locked assets (TVL) in the protocol by 24% to $8.46 billion, allowing Terra to maintain its position as the second largest DeFi chain in the world, with TVL surpassing the $15.33 billion threshold. reached dollars.

Additionally, Anchor’s ANC token is up nearly 90% over the past two weeks. Although news of the $450 million sum shook investors a little on February 10, everything was back to normal the next day.

At the time of writing, ANC is down about 5% and trading at $2.29 after gaining about 29.65% in the previous two days.

Anchor Protocol Price Action | Source: TradingView

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.

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