Terra (LUNA) faces the prospects of hit $100 in the coming weeks as it paints a classic bull pennant structure.

In detail, balderdash pennants announced as the price trends inside a triangle pattern after a stiff move upside. Many analysts come across it equally a sign of bullish continuation, i.e., they recall the instrument would eventually intermission above the triangle'southward upper trendline to resume its price rally higher.

Additionally, the profit target of a bull pennant structure typically comes to be the length equal to the size of the previous toll rally, called flagpole, when measured from the breakout point. As it appears, LUNA has been forming a similar blueprint on its lower-timeframe chart.

LUNA/USDT four-hour nautical chart featuring Balderdash Pennant setup. Source: TradingView

Considering the breakout happens at the bespeak where the bull pennant trendlines converge — the apex — the platonic profit target comes out to be over $22, the flagpole tiptop. That puts LUNA on the road to about $100.

Supportive bullish catalysts

The bullish technical setup in the Terra market place appeared equally LUNA rallied near 65% in less than three weeks to become the 10th-largest cryptocurrency past market capitalization.

The digital asset jumped past Dogecoin (DOGE) and Avalanche (AVAX) to value over $28.60 billion, almost one.18% of the current full cryptocurrency market valuation of $two.30 trillion. Meanwhile, LUNA's token toll climbed from $43.fifty to over $77 on Dec. 5, a new best loftier.

LUNA circulating market capitalization. Source: Messari

Traders took cues from Chiron Partners, a Hong Kong-based venture capitalist firm, that announced Dec. 8 that it had raised $50 one thousand thousand for a defended fund, dubbed Chiron Terra Fund I, to build decentralized finance (DeFi) and metaverse-linked nonfungible token (NFT) projects atop the Terra blockchain.

Jake Cormack, master operating officeholder at Chiron Partners, credited Terra's growth potential backside their determination to choose them as their official public ledger, particularly later the blockchain's recent Columbus-five upgrade, which promises to enable higher scalability and greater cantankerous-chain interoperability.

Deflation FOMO

In detail, the Terra ecosystem consists of a family of stablecoins pegged to a growing listing of fiat currencies and a mining token, LUNA. LUNA serves as a governance token, volatility assimilation tool, and rewards catcher through "seigniorage" and transaction volumes.

The volatility absorption feature, in item, proves to be the most bullish example for LUNA. Notably, the Terra ecosystem maintains its stablecoins fiat-peg past called-for LUNA tokens. In other words, if the price of Terra's native stablecoin TerraUSD (UST) goes to a higher place $1, the protocol burns LUNA to mint more UST, thus bringing its value dorsum to $1.

Conversely, if the UST value goes below $i, the protocol swaps the stablecoin for LUNA to prop up its prices. With the Columbus-5 upgrade and Chiron'southward $50-one thousand thousand fund promising to bring more projects to the Terra ecosystem, anticipations of more deflationary pressure on LUNA take been rising.

Every bit Cointelegraph reported, UST stablecoin adoption is growing with its net supply hitting a new record high of $viii.221 billion on Dec. viii. On the other hand, according to TerraAnalytics, the Terra protocol has burned more than 104 1000000 LUNA tokens ever since the Columbus-5 upgrade went live at the end of September.

Talis's $2.3M NFT marketplace

Bullish cues for LUNA before the Chiron announcement besides came in the form of Talis. The startup raised $2.3 one thousand thousand in funding led by ParaFi Capital and Arrington Capital letter to build an NFT marketplace on the Terra blockchain.

LUNA/USDT versus BTC/USD daily price nautical chart. Source: TradingView

Two days after the announcement, LUNA rose nearly thirteen% to achieve its new all-time high despite a major correction in Bitcoin (BTC), Ether (ETH), and nigh other cryptocurrencies.

The views and opinions expressed here are solely those of the author and do not necessarily reverberate the views of Cointelegraph.com. Every investment and trading move involves take a chance, you should conduct your own research when making a decision.