Luna Foundation Guard Announces Purchase of $1.5bn in Bitcoin

The Luna Foundation Guard (LFG) has been in bitcoin (BTC) purchase mode since it announced plans to hold $10 billion in BTC reserves for TerraUSD (UST). In February, the LFG created a BTC denominated reserve for UST.

UST is pegged to the USD. The pegging mechanism involves the issuance and burning of LUNA tokens. 

At times when the price of UST sits above $1, users can mint UST by burning LUNA. Burning LUNA then reduces the supply of LUNA, which increases the value of LUNA.

To reach its $10 billion BTC reserve target, the LFG has actively been purchasing BTC. This week, the LFG announced another sizeable purchase.

Overnight, the Luna Foundation Guard (LFG) announced the purchase of another $1.5bn in BTC.

News of the purchase had a muted impact on LUNA, which succumbed to broader crypto market forces.

LUNA remains under pressure following Thursday’s 4.43% decline that reversed a 4.46% gain from Wednesday.

On Thursday, market jitters over inflation and Fed monetary policy left LUNA and the broader crypto market in negative territory.

LUNA will need to move through the day’s $82.92 pivot to target the First Major Resistance Level at $87.27. LUNA would need the broader crypto market to support a breakout from $85.

An extended rally would test resistance at $90 and the Second Major Resistance Level at $92.15. The Third Major Resistance Level sits at $101.38.

Failure to move through the pivot would bring the First Major Support Level at $78.03 into play. Barring an extended sell-off, LUNA should steer clear of sub-$75. The Second Major Support Level sits at $73.69.

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bearish signal. LUNA sits below the 50-day EMA, currently at $84.89. 

This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also fell back from the 200-day EMA; LUNA price negative.

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