Historical data has always shown a close correlation in the social media coverage of major cryptocurrencies and their price dynamics. In most cases, more active discussions on social media platforms lead to the growing demand for such crypto assets.
Recent data show crypto proponents are increasingly expressing a higher interest in Terra (LUNA) since October 2021 despite the overall decline in the crypto market.
According to the social media statistics offered by Santiment’s analysts, the frequency of LUNA’s mentions on social media has reached a record high as its price continues to rally. The most probable explanation is that there is a time lag between the growing users’ interest and price changes.
Based on this metric, a significant (at least 20%-30%) growth of LUNA’s price looks highly feasible in the quarter. Available historical data confirms the reliability of this indicator that results in superb performances. Trending cryptocurrencies tend to onboard more curious users, thus increasing mainstream reach. This bullish impulse is likely to boost LUNA past the current resistance level in the charts and ignite a positive cycle.
The correlation between Terra (LUNA) and the dynamics of the entire crypto market creates additional perils to the above expectations. If the market valuation of Bitcoin or Ethereum plunges in the coming days, the panic would affect most major cryptocurrencies. Although such risks exist, they are more downward for LUNA compared with other crypto assets because Terra also develops the UST stablecoin.
Consequently, the demand for LUNA is also likened to the need for stablecoins that continue being in high demand even during periods of market decline. The fact of attracting an additional $1 billion in direct investments from strategic partners like Jump Crypto and Three Arrows Capital also confirms that LUNA has sufficient resources for introducing innovations in its ecosystem.
Both supply and demand factors have designated the anticipated growth of Terra. If its social media support remains high, its appreciation may continue for a longer period. The reactions of both small and large holders demonstrate the expected price increase. From a long-term perspective, LUNA also tills to become one of the major crypto assets with high chances to enter the Top-5 crypto rankings.