Avalanche (AVAX) is not having a good time, while LUNA is sending important signals. These two altcoins remind cryptocurrency investors of different things. Avalanche focuses on the success of layer1 solutions in the long term, while LUNA is the favorite of those who focus on speculative movements. So which one will be successful?
Avalanche (AVAX) Coin Analysis
Ethereum’s expansion of its user base through layer2 solutions (Arbitrum, Polygon) and its bright future scare its competitors. In 2021, investors were more optimistic about Ethereum killers in the long term. However, the planned updates (improvements for scaling) to transition to PoS and increase the transaction rate per second reduced their appeal. Moreover, PayPal recently issued its own stablecoin here, just like one of China’s largest banks issuing paper on the Ethereum network.
Although the possibility of the multi-chain world being invaded by Ethereum L2 solutions worries investors, let’s examine the short and medium-term price outlook.
At the time of writing, BTC is struggling to maintain the $29,500 zone. This indicates that large investors may have inflated the price to gather liquidity for sales. High-volume transfers sent to exchanges wiped $500 off the price. AVAX Coin, on the other hand, is now finding buyers at $12.6.
The price, which failed to hold the $12.79 level in August, may now be running towards the $12.27 base. Investors should be concerned about further declines unless the resistance zone is exceeded. In the event of a loss of the support zone, the price could continue to erode until the $11.14 level.
Will LUNA Coin Rise?
Why does the price of a cryptocurrency rise? With a major partnership announcement, network update, whale interest, or price pumping by speculators. LUNA Coin investors are waiting for speculative rallies because the minds behind Terraform Labs are behind bars. However, the price has been creating new all-time lows for a long time.
It doesn’t seem logical for a rise to enrich investors who buy at all-time lows in the current liquidity shortage. It is also not very reasonable for the price to rise with a major development in the network because popular applications on the network have already escaped last year. In this case, it may be overly optimistic to believe that the price will reach $100 again for LUNA Coin. In fact, if you are feeding this optimism from mysterious speculators on social media, you may be deceived.
The price of LUNA Coin started the year at $2.34. On June 10, it reached an all-time low of $0.48. Now it is finding buyers at $0.55. If the price does not promise a bright future and is so close to the all-time low, it is expected to make deeper bottoms.
The Importance of Multiplication in Cryptocurrency
Let’s open a brief heading and see how ridiculous the price targets on social media are. You can see that many accounts give absurd targets like $0.1, $1, or even $10 for LUNC. The supply is 5 trillion 814 billion. For the LUNC price to be $1, the market value needs to be $5 trillion 814 billion. Or for it to be $0.1, it needs to reach a market value of $581 billion. Currently, the cumulative value of cryptocurrencies is $1.18 trillion. Even if we see that this is $10 trillion during the next bull season, LUNC can never reach this market value. What if the supply decreases? When you have millions of LUNC tokens, which supply will disappear? If everyone burns their supply, the supply can decrease, but if everyone wants to become a millionaire, a 99.9% supply decrease is also not possible.
Let’s look at the same thing for LUNA. The total supply is 1 billion and there are 342 million tokens in circulation. To have a price of $10, it needs a market value of over $3 billion. For $100, it needs to exceed a market value of $30 billion.
With strong competitors such as APTOS, SUI, COSMOS, Solana, AVAX, and many more, how will LUNA generate value and create a market value of $30 billion? This is not as impossible as LUNC, but it is a very low probability.
In summary, you don’t even need four operations to find out who is mocking your dreams when you say circulating supply * target price.
