LUNA: Days Above and Below $52

    This dashboard aims to analyse the number of times LUNA closed above and below the $52 price level since the first time it closed above $52: November 8th 2021.

    Introduction

    Recently, this article announced that the Luna Foundation Guard (LFG) has acquired one billion dollars worth of Bitcoin by selling LUNA to whales. This Bitcoin will be used as a reserve for UST redemptions in case of a UST bank run or death spiral as explained by Westie in this tweet.

    In short, in a bank run, people are losing faith in the UST and selling it for real dollars. When UST is sold, LUNA is minted. This LUNA minting would increase the supply of LUNA causing the price to go down. This could then lead to people losing faith in LUNA and UST resulting in even more selling of UST: a death spiral. Before this acquisition, LUNA was the only currency that could be minted when UST was sold. Now however, BTC can also be 'minted' when UST is sold. People are less likely to sell their Bitcoin compared to LUNA, which would break the death spiral.

    After some on-chain digging, Twitter user Pedro Ojeda found the transactions of the selling of LUNA by LFG and summarized it in this tweet. He found out that nearly 20M LUNA was sold for an average price of $52 per LUNA. Therefore, many users are saying this $52 is the new floor price of LUNA as huge whales are willing to buy at that price. In this dashboard, we will be looking at the number of times LUNA has closed below and above this $52 dollar level, since the first time it closed above $52 on November 8th 2021.

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    The Data

    Conclusion

    It is clear that LUNA has closed above $52 the majority of the time since it first closed above it. When looking at the chart, we can see that LUNA still closed a few times below $52, but has not stayed there for an extended period of time. This indicates that maybe $52 dollars is indeed the new floor price of LUNA.