Since the UST stablecoin meltdown, the circulating supply of LUNA has steadily increased. This is primarily due to individuals redeeming their staked UST for the digital asset, making its supply rise dramatically in a short period.
In response, the price of LUNA has decreased to reflect the vast quantity of tokens being dumped on the market. Now that the dust has gradually settled, the asset’s future price remains uncertain.
$1 LUNA Still Possible?
Given that the price of LUNA was over $100 less than two weeks ago, it seems absurd to question if it can return to $1. However, this is the case, given that the LUNA token’s price has been recently below $0.0001. Investors are now unsure if its price can ever recover.
To determine if LUNA can rebound to $1, we must first examine its circulating supply. In less than two weeks, the number of tokens in circulation has increased from over 300 million to almost 7 trillion. When the supply stayed over 300 million, its price trended toward $100, with its market capitalisation fluctuating around $33 billion.
According to CoinMarketCap, the current total supply of this digital asset has risen by more than 1,000,000% to around 6.9 trillion tokens. For LUNA to reach $1, the market capitalisation would have to reach $7 trillion, assuming the existing supply remains unchanged. Given that the whole crypto market capitalisation peaked at $3 trillion, this is now unachievable.
LUNA is trending low at $0.00018. Source: TradingView
LUNA has to trade at $0.005 per token to reach market capitalisation before the crash. Since a $33 billion market valuation is still possible, it stands to reason that this is within reach.
Nonetheless, it is essential to consider investor sentiment. Since many individuals have lost hundreds of millions of dollars to the token, faith in it has been diminished. Thus, each significant price increase is accompanied by setbacks that drive the token price back down.
LUNA’s price might potentially rise to $0.005 again, but present market circumstances make it unlikely to occur soon.