Terra (LUNA) price up 4.50% on the day, targeting $60 as next key level

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Cryptocurrencies have been trading in the green for most of the past three days, with the majority posting sizable gains. Terra native coin LUNA embarked on an uphill run heading into the weekend, breaking through the $55 resistance level on Saturday.

LUNA’s attempt to climb above $60 on the same day, however, was rejected immediately towards $54. The crypto token mounted another challenge before the end of the weekend but still failed. LUNA is, at press time, trading at $57.31, 44% below its December high.

Elsewhere, Coin Bureau host Guy recently shared his thoughts on the price direction of LUNA and the UST stablecoin this year. More information on these forecasts and LUNA’s market performance below:

Terra’s LUNA could gain 2x to 3x in value, Coin Bureau host predicts

Last Tuesday, Guy, the host of crypto commentary show Coin Bureau, shared a YouTube video in which he laid out his prediction for Terra’s LUNA. Guy explained that the crypto asset is poised to gain massively despite the current market instability.

He revealed that LUNA/USD could grow up to three times its current value, pointing to the growing popularity of Terra’s UST algorithmic stablecoin as a factor that would drive the upside. Guy told his more than 1.9 million followers that LUNA usually prevails in a bear market and the growing demand for UST could do better.

LUNA functions as a price stability mechanism for UST via the mechanics of supply and demand, which helps keep the stablecoin pegged to $1. To some extent, the price of LUNA is determined by demand on UST. Basing his prediction on this correlation, Guy noted that an increase in demand for UST could drive the price of the crypto asset higher.

Demand for UST is on the Rise – Here’s Why

One of the reasons the pseudonymous host pointed to as the cause of this spike is the “safe haven status.Guy highlighted UST’s ability to maintain its foothold even in an unfavorable market, qualifying itself as a better stablecoin compared to other alternatives.

He also pointed to Terra’s decentralized savings and yield protocol, Anchor, as another demand driver. With a total value locked of $8.04 billion (excluding borrowed TVL), Anchor is Terra Chain’s most popular DeFi project. The lending protocol represents approximately 54% of Terra’s DeFi ecosystem.

Terra has established itself as a growing hub for decentralized apps, as the number of apps on the network has grown exponentially in the last year alone – from a single dApp to over 100 currently.

Existing regulatory concerns regarding the role of centralized stablecoins further put UST at an advantage as it is a decentralized stablecoin. Since September, financial watchdogs in the United States have indicated growing disapproval of these stablecoins, likening them to poker chips. Over 10 billion UST have been minted since then, reflecting growing interest.

Guy also referenced Circle and Tether to explain that centralized stablecoin companies can freeze user funds at any time. Tether recently froze the holdings of three Ethereum addresses totaling around $160 million in USDT.

With all of these factors in play, Guy concluded that the only thing holding LUNA back at the moment is its large market cap, but UST’s reputation and availability could rally a double or triple price surge on the token.

Course Terra (LUNA)

The charts show that LUNA/USD has recorded gains of 4.50% over the past 24 hours. This collectively brings the 7-day earnings figure to 21% according to data from CoinMarketCap. LUNA’s price spike saw market capital swell to $23 billion to put some distance between Terra and eighth-placed Polkadot, which has a market capital of $21 billion.

LUNA/USD trading chart over the weekend

Market sentiment and on-chain signals favor a further rise in LUNA’s price. Considering that LUNA’s way forward presents no significant challenges for bulls, the token is well positioned to touch $60 soon if it can maintain momentum.

To learn more about this token, see our Investing in Terra LUNA guide.

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