Latest Terra (LUNA) Price Analysis

Deep Dive

1. DeFi Sector Revival (Bullish Impact)

Overview:
The DeFi sector’s total value locked (TVL) hit $170B on September 18, 2025 – surpassing pre-Terra collapse levels (CoinDesk). While Ethereum dominates, Terra’s role in DeFi’s 2021–2022 growth resurfaced in narratives, drawing speculative interest.

What this means:
The milestone signals sector maturity, indirectly benefiting Terra via renewed credibility. LUNA’s price often reacts to DeFi sentiment shifts due to its historical ties, though its current ecosystem is smaller post-2022 reboot.

2. LUNC Network Upgrade Support (Mixed Impact)

Overview:
Binance announced support for Terra Luna Classic’s August 15 network upgrade (CMC Community). While LUNA (Terra 2.0) and LUNC are separate chains, the news fueled speculation about cross-chain synergies.

What this means:
Investors may be betting on indirect benefits, like shared developer activity or burn mechanisms. However, LUNA’s fundamentals remain decoupled from LUNC’s upgrades, creating asymmetric risk if expectations fade.

3. Technical Rebound (Neutral)

Overview:
LUNA’s RSI (41.68) exited oversold territory, and price held above the critical Fibonacci support zone of $0.129–$0.137. The MACD histogram (-0.00189) still signals bearish momentum, but short-term traders capitalized on oversold conditions.

What to look out for:
A close above the 30-day SMA ($0.149) could target $0.153–$0.158. Failure to hold $0.137 may retest June’s low of $0.125.

Conclusion

LUNA’s rise reflects sector-wide optimism, speculative spillover from LUNC upgrades, and technical buying – but lacks direct catalysts tied to its own ecosystem. Key watch: Can Terra 2.0 attract meaningful DeFi projects to sustain momentum, or is this a dead-cat bounce?

Deep Dive

1. Legal Uncertainty (Bearish Impact)

Overview: Terraform Labs founder Do Kwon’s guilty plea to fraud charges (17 Aug 2025) remains a drag, with investors wary of ongoing lawsuits and potential asset seizures. While LUNA’s price initially stabilized post-plea, the lack of resolution in South Korean proceedings and a $4.5B SEC settlement (Coindesk) have reignited concerns about long-term liabilities.

What this means: Legal risks deter institutional interest and create selling pressure from holders exiting positions. The token’s 66% annual decline reflects persistent distrust in Terra’s ecosystem post-collapse.

What to look out for: Updates on Kwon’s sentencing (DOJ recommends ≤12 years) and South Korea’s extradition efforts.

2. Technical Weakness (Bearish Impact)

Overview: LUNA broke below its 7-day SMA ($0.145) and 30-day SMA ($0.149), with the MACD histogram (-0.002) signaling accelerating bearish momentum. The RSI (34.35) nears oversold territory but lacks bullish divergence.

What this means: Traders are exiting on breakdowns, targeting Fibonacci support at $0.129 (swing low). The 200-day EMA ($0.197) remains a distant resistance, discouraging dip-buying.

Key threshold: A close below $0.129 could trigger a 15% drop toward the 2025 low of $0.125.

3. Liquidity Crunch (Mixed Impact)

Overview: LUNA’s turnover ratio (0.218) indicates thin markets, where $20.7M daily volume struggles to absorb sell orders. This exacerbates downside moves, as seen in the 27% 24h volume spike during the dip.

What this means: Low liquidity magnifies price swings, creating a feedback loop of panic selling. However, it also raises potential for short-term rebounds if buy-side liquidity improves.

Conclusion

LUNA’s decline reflects a toxic mix of unresolved legal risks, deteriorating technicals, and fragile liquidity. While oversold conditions might invite speculative bids, the lack of fundamental catalysts and regulatory clarity limits upside.

Key watch: Can LUNA hold $0.129 support, or will the Terra ecosystem’s legal scars trigger new lows? Monitor Kwon’s sentencing timeline and Bitcoin’s dominance (58.18%) for broader market cues.