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Terra Q153: Recently, a deal was announced wherein LUNA was sold for BTC at a price of about $52/LUNA. Some commentators on crypto-Twitter are contending that this represents the new floor price for LUNA. Over a time period of your choosing, how many days has LUNA closed above this price? How many days has it closed below this price?
Introduction
It is clear that LUNA has experienced a very considerable and solid bullish rally since the beginning of 2021. However, since its ATH the $100 or so at the end of the year, the price has started to experience some corrections. The difficult thing now is to know where the support is to buy back in.
There are many people speculating and many others joining the bandwagon, as is always the case. There is a trend these last days that predicts or says that it seems that the floor price of LUNA is now $52. But... is this really the support price? We are going to see it through this analysis that I have done these days. To see it, we will check if the support is really at $52 or not, and we will see how LUNA is behaving under the effects of the market. Especially when it goes down.
Methodology
To carry out the task, I have taken into account the oracle_prices Terra table in order to obtain the daily price of Terra and compare between several days and get results about how many times LUNA stayed below 52 and which were the behaviour situations. In this case, I have selected the past three months for the analysis.
Taking a look at the chart, we can see how LUNA ended the year in a bullish trend reaching the ATH in December 26th, and closing the year at $90 USD. However, when the 2022 started, there was a big correction during the first past month of January reaching for the first time of this period values below $52. The price seemed to be stable at that point during the major part of the February month, where the price oscillates between 47 and 57 dollars.
Talking in numbers, during that period of time, the price of LUNA close below $52 13 times, while 78 closed above that price. However, during the final days, the price of LUNA started to jump again. It represents that despite there was a big correction during January, only 14% of days, LUNA price closed below $52. The final metrics shows as that the average price of LUNA when it closed below 52 has been $50.5 USD.
Conclusion
To conclude, we have seen how among the evaluation period of time including 92 days (past 3 months), only in 13 of them (representing 14%) LUNA price closed beow $52, with an average price of $50.5, indicating that $52 price of LUNA is a good approximation to say that this is potentially the floor price of LUNA. Why? Because we have observed as well in the first chart how the price were stabilized at that point fluctuating between $47 and $57 dollars and finally rebounding hard again during these last days.