As per data from CoinMarketCap, Terra (LUNA) has erased more than half of its 2021 gains, currently down 55.79% from Dec. 27 2021 all-time highs of $103.33.
The token, which backs Terra's algorithmic UST stablecoin, was down over 9.48% in the last 24 hours, according to CoinMarketCap. It traded as low as $43.47, the lowest price since November. At the time of publication, LUNA was changing hands at $46.29.
LUNA, the Terra ecosystem's native coin, appears to be suffering from unfavorable sentiment in the aftermath of the recent Wonderland controversy.
Terra's price drops accelerated after Twitter user "Zach" revealed Michael Patryn, the co-founder of the controversial Canadian exchange QuadrigaCX, as a core member of the Wonderland project.
The ramifications of that discovery were felt on the market in relation to another Wonderland project, Abracadabra, which is headed by founder Daniele Sestagalli. Because UST can be staked to lend out MIM, a stablecoin that is soft-pegged to the U.S. dollar and minted by the Abracadabra lending platform, the squabble is harming Terra. The price of LUNA is linked to the UST stablecoin's total value locked.
Likewise, LUNA seems also to have been tailing Bitcoin's losses against the ongoing market uncertainty. At the time of publication, Bitcoin was trading at $37,227, down 1.96% in the last 24 hours. At present prices, Bitcoin is down 45.89% from all-time highs of $69,000.
The possibility of a rebound exists
LUNA started a steady decline after touching highs at $84.90 on Jan. 20. Out of 12 trading days, Terra had 10 consecutive red days, with its price dropping over 50%. Despite the bearish trend, there remains a chance of a short-term rebound.
Meanwhile, LUNA appears to be testing its MA 200, which is currently at $45.38, for a possible rebound on the daily timeframe chart. If that happens, the next upside target for LUNA appears to be approaching $75. A significant move below the MA 200, on the other hand, might result in another 30-40% drop.