How Terra's (LUNA) US$30 bn crash is benefitting this crypto

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How Terra's (LUNA) US$30 bn crash is benefitting this crypto

 How Terra's (LUNA) US$30 bn crash is benefitting this crypto
Image source: © Kviztln | Megapixl.com

Highlights

  • Terra's (LUNA) drastic decline has now forced the protocol to migrate to other networks such as Polygon (MATIC).
  • Polygon CEO Ryan Wyatt and founder Sandeep Nailwal revealed they are working on multiple Terra projects in order to help them migrate to MATIC network seamlessly. 
  • At the time of writing, MATIC was up by 2.27% and was trading at US$0.710835 with a 24-hour trading volume of US$59,73,18,384.

Ever since Terra's (Luna) decline started, it has severely dented the crypto market on a global scale. The price of Bitcoin went below US$30,000 on 12 May, leaving it high and dry. And not just Bitcoin, the global crypto market cap went drastically down to US$1.21 trillion at one point in time last week. 

Besides, large withdrawals from Anchor Protocol further dented TerraUSD investors, eventually leading to Terra losing its peg. Terra decided to pull the plug on many apps, including the Anchor, which happens to be the most significant DeFi protocol on the chain. 

As of 17 May, Terra has lost almost 100% of its value ever since it achieved its all-time high. On Tuesday, it was trading at US$0.0001851, with a trading volume of US$3,03,39,79,091. The global market is still down by 0.14% and was placed at US$1.30 trillion in the past 24 hours. 

However, amid all Terra's doom, one crypto that seems to be benefitting from this is Polygon Network. 

Also read: What does Terra's (LUNA) realistic revival plan look like?

Polygon vs Terra  

Terra's drastic decline has now forced the protocol to migrate to other networks such as Polygon (MATIC). In a move that will benefit both the protocols, Polygon CEO Ryan Wyatt and founder Sandeep Nailwal revealed they are working on multiple Terra projects in order to help them migrate to MATIC network seamlessly. 

Image credit: Twitter @Fwiz (Ryan Wyatt)

For this, MATIC protocol will allocate the resources and capital to build confidence within the developers and Terra communities. Ryan stated that Polygon would be allocating resources for these migrations in order to ensure smooth transitioning for developers and their respective communities. This is expected to expedite a faster recovery of various DApps, which once stood at US$30 billion.

Nailwal invited various Terra community projects who intend to have a shared chain to choose Polygon, and through SUPERNET can inculcate an app-specific change.

Image credit: Twitter @sandeepnailwal (Sandeep - Use Stripe on Polygon)

Impact on Polygon (MATIC)

The announcement did seem to have a positive impact on MATIC on 17 May. At the time of writing, MATIC was up by 2.27% and was trading at US$0.710835 with a 24-hour trading volume of US$59,73,18,384. 

Also read: World’s leading stablecoin Tether de-pegs and gets back on course

Though the extreme fear sentiment is currently gripping the overall crypto market, the Polygon chart suggests bulls and bears are fighting neck and neck. Polygon's Relative Strength Index (RSI) indicates that there is still decent traction but not enough to pull itself to an extended rally. The RSI is placed at 33.66, showcasing that it's managing to stay afloat in this bearish market. 

Image credit: Trading View

The MACD (Moving Average Convergence Divergence line) indicates that the MACD line (in blue) is still below but is fast catching up with the signal line (in orange), indicating that a rally may be on the horizon soon. Still, for this to happen, the technicalities would need to be the same. The investors would now hope it can sustain it, and this announcement will see it extend its rally.

If one were to look at LUNA's 50, 100 & 200 EMA (exponential moving averages), then it does indicate it may rise to US US$1.14522682, US$1.134972182, and US$1.46836685 on the way forward. These indicators would be a welcome break considering it has been a prolonged period of the bearish trend and would like to reverse it.  

Volume-wise, Polygon is still way behind in regaining the investors' confidence, and this could take a while before it can win back the trust. Currently, the MATIC volume is down by 4.68%, and would hope this Terra news will bring back investors to its platform.  

Conclusion

Having said that, the critical thing in this volatile crypto market is to make sure that one does thorough market research and ensure that they study the trends, and then make a move in the market. Any investment decision without the proper research may result in loss, and therefore one must be wary of it. 

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