LUNA Price Run Investigation

    Terra - 7. MetricsDAO

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    Overview

    On 8 May 2022, UST, the Terra native stablecoin, lost its peg with the dollar. The loss of the peg caused the Terra ecosystem value to its complete collapse on 10 May.

    Two options were available for Terra developers, either continue the terra or abandon it and establish a new project. A group of the Terra developers take the latter option and started a new project called Terra 2.0 with the native token LUNA.

    This dashboard investigates the recent up and down in the price of LUNA.

    The possible effect of Crypto Market and Internal activities have been investigated.

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    LUNA Price vs the Crypto Market

    Crypto market is largely influenced by BTC price. We can also say that the BTC price is an indicator of the Crypto Market.

    The LUNA price is also can be affected by changes in BTC price.

    The line chart below shows how LUNA price and BTC price has changed overt time in a hourly basis. We can see the first surge was happened on Jan 9th with a small increase in the BTC price. This is not clear whether it is followed by BTC increase or they are unrelated. The next surge on 14th can be clearly as a consequence of the BTC price increase. This is also intensified by the announcement of Station Wallet.

    The scatter plot also shows that there is a variation in the LUNA price when the BTC price ranges in 21K or just above 17K. In between the BTC price and the LUNA price go up and down hands in hand.

    LUNA Price and Swaps

    We didn’t see a strong relationship between the LUNA price and BTC price on 9th January.

    In this section we investigates internal activities of terra chain.

    Graph below shows the hourly number of swaps next to the LUNA price. We can see the first surge on January 9th is happened simultaneously with a surge in Swap numbers.

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    Descriptive

    This graph shows how the price of LUNA has changed since January 9th.

    We can see that the price jumped from 1,38 to 1,74 in one hour. Then it settled and continued fluctuations at 1.6 USD.

    Since January 13th the price has started a growing trend with a surge 14th Jan. It finally passed the level of 2.0 $ on January 15th.

    Overall the price increased above 50% in a week.

    How we can explain this increase in the LUNA price?

    Breaking down the swaps into swap in and out we do not see any obvious pattern in relationship between swaps and LUNA price.

    However, it can be seen than at the price of 1,6 $ when the LUNA surged the number of swap from LUNA is higher than swap for LUNA. Meaning that soon after the surge many sold their LUNA which led to a drop in the price immidiately.

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    Zooming in on the time period between 9th and 10th January, the graph below shows the detail of swaps from and to LUNA in this time period.

    We can see that before the LUNA price jumped we have a big LUNA sell. Then there are number of big LUNA buy.

    What the data shows is non effective role of whales on decentralized trading in the LUNA price change.

    Graph below shows what addresses were involved in trading the time period between 9th and 10th and in what direction.

    The address which has had a biggest involvement sold LUNA as much as bought. The other important address bought LUNA not sold.

    Conclusion

    The dashboard investigates the recent fluctuations in the price of LUNA and explores possible causes. The impact of the overall crypto market, primarily influenced by the price of Bitcoin, and internal activities within the Terra chain, where LUNA is used, are analyzed.

    The data shows that the initial surge in LUNA's price on January 9th may not have been directly related to changes in the price of Bitcoin, but the subsequent surge on January 14th can be clearly attributed to an increase in the price of Bitcoin as well as the announcement of Station Wallet. Additionally, the analysis of swaps, or the exchange of LUNA for other cryptocurrencies, within the Terra chain shows a lack of correlation with changes in the price of LUNA and suggests that decentralized trading and the actions of large holders of LUNA, known as whales, do not play a significant role in determining the price of LUNA.

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