LUNA’s circulating supply has increased continuously since the UST debacle began. This was mainly due to people redeeming their staked UST for the digital asset, causing its supply to increase dramatically in such a short amount of time. In turn, the price of LUNA had decreased to reflect the huge number of tokens that were being released on the market. Now that the dust has finally started to settle, the question remains where the price of the asset might end up.

$1 LUNA Is it still possible?

Now, it may sound comical to debate whether the price of LUNA could return to $1 given that less than two weeks ago, the price was above $100. However, this is the case as the digital asset is now about four zeros out of $1 and even that seems like a generous value. What is on investors’ minds now is whether the price of the digital asset will ever be able to recover significantly.

Related Reading | TerraLabs sold over 80,000 BTC to rescue its stablecoin, Luna

To really assess whether LUNA can rally to $1, the first thing you need to look at is the circulating supply of the digital asset. In less than two weeks, it has grown from just over 300 million to almost 7 billion tokens in circulation at the time of writing. When the supply still hovered above 300 million, the price was trending $100, meaning its market capitalization at the time was averaging around $33 billion, depending on price fluctuations.

Today, the total supply of the digital asset has grown by more than 1,000,000% to stand at just over 6.9 trillion tokens, according to CoinMarketCap. For LUNA to hit $1, it would mean the market cap would have to touch $7 trillion, and that is if current supply holds steady. This is currently impossible given that the total crypto market capitalization at its highest point was $3 trillion.

LUNA trending down to $0.00018 | Source: LUNAUSD on TradingView.com

However, for LUNA to reach its previous market capitalization before the crash, the token would have to be trading at $0.005. Given that a $33 billion market cap remains in the realm of possibility, it’s safe to say it’s still within reach.

Related Reading | LUNA Aftermath: Total Crypto Market More Oversold Than Black Thursday

However, one thing to watch out for is investor sentiment. Many people have lost hundreds of millions of dollars as a sign that faith in him has run out. Therefore, with any significant increase in price, there are trade-offs that cause the price of the token to drop back down.

This leads to the conclusion of this analysis, which is that the price of LUNA could possibly go back up to $0.005. But with current market conditions, this may not happen in the short term and depends entirely on whether supply stops growing.

Featured image from TheNewsCrypto, chart from TradingView.com

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This post LUNA supply is approaching 7 billion, is $1 still possible?

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