09 DEC 2021 (THU)- Terra Luna (LUNA) Report Card

By quantdoge | Daily Crypto Risk Report | 10 Dec 2021


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
  • I do hold a long position in Terra Luna as a token holder.

1A. Top 3 Good News for LUNA HODLERS !!!

2. How Terra Performs Relative to Other Cryptos ?

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As of 08 Dec 2021, Terra has made a cumulative return of 31,177.51% since Jan 2020 and 11,128.12%  since Jan 2021. It is currently the greatest performing crypto asset since Jan 2021 as compared to the other cryptocurrencies presented above.

3. Technical Analysis on Terra

3.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when LUNA is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of LUNA (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of LUNA (blue line) to rise to its average level (orange line).

As of 08 Dec 2021, VWAP is suggesting that LUNA is trading on an increasing momentum these few days.

3.2. Moving Average Convergence Divergence (MACD)
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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of LUNA closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that LUNA is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that LUNA is losing momentum. 

As of 08 Dec 2021, MACD is suggesting that LUNA is trading on an increasing momentum these few days.

3.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of LUNA
- Upper Band (orange line), which is computed by adding 2 standard deviations of LUNA on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of LUNA from SMA (20)
- Close (green line), which is the daily closing price of LUNA

Whenever close line (green) touches the lower band (red), it indicates that LUNA is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that LUNA is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 08 Dec 2021, Bollinger Band is suggesting that LUNA has been overbought.

3.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that LUNA is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that LUNA is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 08 Dec 2021, RSI is suggesting that LUNA is neither overbought nor oversold across all trading windows.

Based on the technical analysis presented above, quantdoge holds a neutral stance on the short-term price action of LUNA, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

4.Terra Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Terra defined above, LUNA seems to trade at a lower risk level on 08 Dec 2021 as compared to 10 days before on 28 Nov 2021, with its biggest pullback being seen at -19.15% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

5. Monte Carlo Price Simulation for Terra

How did quantdoge simulation perform vs the actual LUNA price movement over the last week ?

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Over the last 7 days, LUNA has risen to the upper 75th percentile of quantdoge simulations, indicating that LUNA was overbought to a relatively overvalued position. 

6. LUNA Community Analytics

Number of LUNA Followers In The Past 24 Months

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During the past 24 months, Terra followers have grown 8,215.94 % from 2,904 to 241,495 on Twitter and remained stagnant on Reddit.

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Monthly increment of Terra Twitter followers peaked on Nov 2021 and its monthly increment of Reddit followers peaked on Dec 2021.

Number of LUNA Followers In The Last 30 Days

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In the last 30 days alone, Terra followers have grown 19.64 % from 201,851 to 241,495 on Twitter and grown 28.69 % from 14,473 to 18,625 on Reddit.

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Daily increment of Terra Twitter followers peaked on 06 Dec 2021 and its daily increment of Reddit followers peaked on 05 Dec 2021.

7. Google Trends Analytics

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terra luna reached its peak in Google Search on 2021-12-05 with a Google Score of 100
Over the last quarter, terra luna Google Score has increased 224.68 % from 30.8 to 100.0
Over the last 6 months, terra luna Google Score has increased 497.01 % from 16.75 to 100.0

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In the past month, terra luna is most sought after in Italy, follow by Singapore and Netherlands.

If you like my analysis and articles, please follow me at @quantdoge for daily updates.

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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