Why Terra Price Soared 30% While The Cryptocurrency Market Corrected?
- Terra and Harmony partner to create a decentralized finance (Defi) platform.
- Terra price aims for $10 if support at $7 holds in the near term.
Terra price outperformed most crypto assets in the market this week after rallying more than 30%. While LUNA explored levels uphill, the crypto market was in retreat, especially for Bitcoin and Ethereum.
At the time of writing, Terra is up over 8% in the last 24 hours amid a fierce fight between the bulls and the bears, with the former battling to close the week above $10. Realize that the short-term technical picture is vividly bullish. Therefore, support above $7 will be crucial to the sustenance of the upswing.
Why does Terra price keep rallying?
Terra's uptrend could be attributed to a partnership the crypto project entered with Harmony. This collaboration will see the two organizations work on a "deep integration" initiative, leading to "a multi-chain future."
According to Harmony, their efforts will be channeled toward developing a new decentralized finance (Defi) platform, focusing on programmable money. Harmony, Stephen Tse, says that they aim to create a "vibrant cross-chain finance ecosystem with UST stablecoin and ONEAnchor fixed-rate lending."
Terra also issues a stablecoin referred to as TerraUSD (TSD), boasting scalability, yield-bearing, and interchain capabilities. TerraUSD seems to be gaining ground fast against other stablecoin like Dai, which struggles with scaling issues. At the moment, TerraUSD is the fifth-largest stablecoin in the crypto market.
Terraform Labs support boosting Terra rally
The majestic upswing in July could also have something to do with Terraform Labs (TFL) support, the firm that develops the Terra blockchain. Terraform recently said that it will sink 50 million Terra SDT (SDT), roughly 70 million UST from the TFL stability reserve fund, to capitalize on the yield reserve for Anchor protocol (ANC).
"TFL will be capitalizing Anchor's yield reserve using 50 million SDT (~70 million UST) from the TFL Stability Reserve Fund.
Supporting Anchor and the Terra community is the mission of TFL, which includes ensuring the long-term interest and success of the Terra ecosystem."
What Is Next For Terra price action?
At the time of writing, Terra trades at $7.15 after hitting achieving new July high of $7.74. The main goal is to hold above $7, which will ensure stability is assumed in the market.
LUNA/USD four-hour chart
For now, the Moving Average Convergence Divergence (MACD) indicator has no defined bearish or bullish outlook. In other words, Terra may take up a sideways trading action in the near term. Note that a golden cross pattern may come into the picture with the 100 SMA crossing above the 200 SMA, in turn validating the uptrend toward $10.