Is Terra alive again? September saw a 300 Percent increase in LUNA prices

The remarkable LUNA surge occurred in the midst of a flurry of both, good and bad news, and technical indicators point to an impending correction.

After the demise of its native token LUNA and stablecoin TerraUSD (UST) in May, Terra has emerged as a contentious blockchain project. However, cryptocurrency traders find it difficult to ignore its recent increases.

LUNA resurrecting itself?

When compared to its low point in May, when LUNA's price fell to almost zero, it has since risen by an astounding 17,559,000% or more than four months.

LUNA's performance in September, meantime, is particularly intriguing considering that it has risen by more than 300% month-to-date following a protracted period of consolidation in the sideways range.

In September, the Terra ecosystem

It is crucial to keep in mind that LUNA also trades on a number of markets under the ticker LUNA2. Terraform Labs, the organisation in charge of the Terra project, separated the previous chain into Terra Classic (LUNC) and Terra LUNA 2.0 (LUNA/LUNA2).

The Terra blockchain's first iteration is called Terra Classic, whereas Do Kwon, the founder of Terraform Labs, developed Terra LUNA 2.0 as part of a regeneration plan. Kwon and his group then periodically airdrop LUNA2 tokens to users impacted by Terra's demise.

On September 9, a day when a lot of things transpired inside the Terra ecosystem, LUNA/LUNA2 began pumping.

In the beginning, Terra Classic (LUNC) approved governance plans to impose a 1.2% daily tax on all of its on-chain transactions. In other words, as CoinGabbar reported here, the proposals will permanently take 1.2% of the LUNC supply from each on-chain transaction. Second, FatMan, a self-described Terra whistleblower, allegedly identified TerraForm Labs as the sender of a suspicious transaction involving 435,000 LUNA2 tokens.

Do Kwon, though, denied the accusations. The pump on September 9 also took place a week after Terra approved a plan to hold its second airdrop of more than 19 million LUNA tokens till October 4.

The technicals of the LUNA price are bearish.

Technically speaking, the price of LUNA runs the danger of experiencing a significant correction in the upcoming days.

The relative strength index (RSI) for the token has risen above 70 on the four-hour chart, which is seen as an overbought area where a correction is more likely. Second, since September 9, the price has been developing a rising wedge, a bearish reversal pattern.

Notably, a rising wedge develops when the price moves upward within an ascending range with converging upper and lower trendlines. After the price crosses below the lower trendline and there is an increase in trading volume, it ends. On September 11, LUNA was attempting to break below its wedge's lower trendline. In this scenario, the price runs the danger of dropping by the maximum height of the wedge.

In other words, LUNA might decrease by 30% from its current price to $4.5.