Since the UST scandal began, the circulating supply of LUNA continues to rise. It is mainly due to people redeeming staked USTs for digital assets, which has caused it’s supply to increase dramatically in such a short time. The huge amount of tokens being dumped onto the market caused the LUNA price to drop. The question now is where will the asset’s price end up?
$1 LUNA Still Possible?
Although it might sound absurd, it is possible to discuss whether the price of LUNA will be able return to $1. This considering that the price was above $100 just two weeks before. This is not the case, however. The digital asset now has four zeros below $1. Even that appears to be a good value. Investors now wonder if it is possible to recover the value of this digital asset in any meaningful manner.
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First, we need to examine the circulating supply to assess if LUNA is able to recover to $1. Within two weeks it has grown to close to 7 trillion tokens. As long as the supply was not exceeded by 300 million tokens, its price trended at $100. According to price fluctuations, it was trading at a market capital of $33 billion.
According to CoinMarketCap, today’s total digital asset supply has grown more than 1,000,000% and is now at just over 6.9 trillion tokens. To reach $1 in LUNA, the total market capital would need to exceed $7 trillion. This is assuming the supply remains stable. The entire cryptocurrency market cap, at its maximum level was 3 trillion.
Source: LUNAUSD on TradingView.com| Source: LUNAUSD on TradingView.com
However, LUNA would need to trade at $0.005 in order to reach the previous market cap prior to the crash. A $33Billion market cap is still possible, so it’s safe to assume that such a goal is within reach.
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Investor sentiment is something you should consider. There have been many instances when investors lost millions and their trust in the token. There are always set-offs to bring the price down after a significant increase in its price.
This brings us to our conclusion that the price for LUNA may rise back to $0.005. This is a possibility, but it will depend on the current market conditions.
Featured Image from TheNewsCrypto. Chart by TradingView.com
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