Terra (LUNA) has seen a significant price increase following Terraform Labs and its co-founder, Do Kwon, agreeing to settle a fraud case with the United States Securities and Exchange Commission (SEC). This development has brought renewed optimism among investors, leading to a notable uptick in LUNA’s market performance.
Settlement with SEC Drives LUNA Price Higher
After a prolonged period of stagnation, LUNA experienced a resurgence in investor interest on May 30, 2024. This upward momentum coincides with the announcement that Terraform Labs and Do Kwon have agreed to settle the fraud charges brought against them by the SEC. The Terra community welcomed this news, prompting a swift price surge. According to CoinGecko, LUNA’s price hovered at $0.67 during European business hours on Friday, reflecting an 11.5% increase over 24 hours and an 11.6% rise over the past week.
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Technical Indicators Signal Potential Further Gains
The recent price action suggests a positive outlook for LUNA. The token, with a market cap of $508 million, had been in consolidation for 46 days before breaking out with a 43% move. Notably, the 50-day simple moving average (SMA) is on the verge of crossing above the 200-day SMA, forming a golden cross—a bullish indicator. This technical pattern suggests potential further gains for LUNA.
After the initial price pump, LUNA pulled back slightly in a classic ‘breakout and retest’ pattern, stabilizing at the top of its previous range. Analysts expect the price to encounter resistance at $0.7, $0.75, and $0.83. Conversely, if LUNA re-enters its previous range, it may continue to move sideways with support levels at $0.62, $0.54, and $0.5.
Understanding the Price Surge
The primary catalyst for LUNA’s price surge is the settlement agreement with the SEC. By agreeing to settle, Terraform Labs and Do Kwon have canceled all scheduled court cases, a move perceived positively by the Terra community. Some crypto analysts, like Eric Cryptoman, predict that LUNA could reach $2 soon if the bullish momentum continues.
Most will think this is a joke but don’t be surprised to see $LUNA trading above 2 dollars soon.
Most will call it risky, and I love that word. Study asymmetric risks. pic.twitter.com/xUoh6rZ5lH
— Eric Cryptoman (@EricCryptoman) March 1, 2024
Despite the positive market response, Do Kwon’s legal troubles are far from over. He is currently out on bail in Montenegro and faces possible extradition to the U.S. or South Korea to address additional criminal charges. The SEC had proposed a staggering $5.3 billion fine, which would be the largest ever imposed on a crypto project. Do Kwon has contested this amount, suggesting a $1 million fine as more appropriate.
Conclusion
As Terraform Labs and Do Kwon navigate their legal challenges, the LUNA price remains under close watch by investors. The settlement with the SEC has injected fresh optimism into the market, potentially setting the stage for further price gains. However, the broader implications of Do Kwon’s ongoing legal issues could still impact LUNA’s future performance.