The circulating supply of LUNA has continuously gone up since the UST debacle began. This has mainly been from people redeeming their staked UST for the digital asset, which caused its supply to rise drastically in such a short amount of time. In turn, the price of LUNA had declined to reflect the enormous amount of tokens that were being dumped into the market. Now that the dust has finally begun to settle, the question remains where the price of the asset might end up.
$1 LUNA Still Possible?
Now, it may sound comical to debate whether the price of LUNA would be able to return back to $1 given that less than two weeks ago, the price was sitting above $100. However, this is the case as the digital asset is now about four zeros short of $1 and even that seems a generous value. What is on the minds of investors now is if the price of the digital asset would ever be able to recover in any meaningful way.
Related Reading | TerraLabs Sold Over 80,000 BTC To Rescue Its Stablecoin, Luna
To really assess if LUNA can recover to $1, the first thing to look at is the circulating supply of the digital asset. In less than two weeks, it has grown from a little over 300 million to almost 7 trillion tokens in circulation at the time of this writing. When the supply still remained above 300 million, the price was trending at $100, meaning that its market cap at that time was averaging around $33 billion depending on the price fluctuations.
Presently, the total supply of the digital asset has now grown by more than 1,000,000% to be sitting at a little over 6.9 trillion tokens, according to CoinMarketCap. For LUNA to get to $1, it would mean that the market cap would have to touch $7 trillion, and that is if the current supply stays stable. This is presently impossible given that the whole crypto market cap at its highest was at $3 trillion.
LUNA trending low at $0.00018 | Source: LUNAUSD on TradingView.com
However, for LUNA to get to its previous market cap before the crash, the token would have to be trading at $0.005. Since a $33 billion market cap remains in the realm of possibility, it is safe to say that this is still within reach.
Related Reading | LUNA Aftermath: Total Crypto Market More Oversold Than Black Thursday
One thing to take into account though is the investor sentiment. So many people have lost hundreds of millions of dollars to the token that faith in it has been depleted. Thus, with any significant rise in price, there are set-offs that rock the token price back down.
This leads to the conclusion of this analysis which is that the price of LUNA could possibly climb back up to $0.005. But with current market conditions, this may not happen in the short-term and is entirely dependent on if the supply stops growing.
Featured image from TheNewsCrypto, chart from TradingView.com
Disclaimer: The following op-ed represents the views of the author, and may not necessarily reflect the views of Bitcoinist. Bitcoinist is an advocate of creative and financial freedom alike.
Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…