Terra (LUNA) circulation circulating supply has been on the increase since the UST fiasco started. This massive increase comes majorly from investors who are redeeming their staked UST for the digital asset.
Due to this massive increase, the price of LUNA has embarked on a significant decline, reflecting the rate at which LUNA tokens are being dumped into the market. But now that the tension is beginning to subside, can the digital token regain its lost strength in terms of price?
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Can Terra (LUNA) Retest $1?
Now, it may sound amusing to debate whether the price of LUNA would be able to return back to $1 given that less than two weeks ago, the price was sitting above $100. However, this is the case as the digital asset is now about four zeros below $1.
To really assess if LUNA can retest $1, the first thing to look at is the circulating supply of the digital asset. In less than two weeks, it has grown from a little over 300 million to almost 7 trillion tokens in circulation at the time of this writing. When the supply still remained above 300 million, the price was trending at $100, meaning that its market cap at that time was averaging around $33 billion depending on the price fluctuations.
Presently, the total supply of the digital asset has now grown by more than 1,000,000% to be sitting at a little over 6.9 trillion tokens, according to CoinMarketCap. For LUNA to get to $1, it would mean that the market cap would have to touch $7 trillion, and that is if the current supply stays stable. This is presently impossible given that the whole crypto market cap at its highest was at $3 trillion.
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Howbeit, for LUNA to get to its previous market cap before the crash, the token would have to be trading at $0.005. Since a $33 billion market cap remains in the realm of possibility, it is safe to say that this is still within reach.
One thing to take into account though is the investor sentiment. So many people have lost hundreds of millions of dollars to the token that faith in it has been depleted. Thus, with any significant rise in price, there are set-offs that rock the token price back down.
This brings us to the conclusion that the price of LUNA could climb back up to $0.005. However, considering the current market condition, this may not play out in the short term and the possibility is entirely dependent on if the supply stops surging.
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