Terra (LUNA) trading volume up 200% as market adjusts to death spiral

It took just seven days for the Terra (LUNA) ecosystem to spiral into a downward spiral as prices collapsed from $85 on May 5 to nearly $0 on May 12. As the market slowly began to clear up what was happening, LUNA’s trading volume saw a steep recovery of over 200% over the weekend.

As a result of the de-pegging of UST, which crashed the LUNA market, LUNA investors mirrored the price dip as CoinGecko registered the drop in trading volumes to $178.6 million on May 13 – a number last seen in February 2021.

Declining trading volume of LUNA. Source: CoinGecko

Terraform Labs CEO and co-founder Do Kwon sought damage mitigation the same day he proposed a revival plan for Terra’s comeback, compensating UST and LUNA holders for holding the tokens during the crash.

Despite the risks involved, Terra’s “insane volatility” still serves as an attractive market for many short-term investors – mainly due to the fact that LUNA temporarily appreciated 600% on May 14.

As investors try to recoup their losses, while others try to cash in on Terra’s comeback, LUNA’s trading volume increased more than 200% to $6 billion. Before the crash, the LUNA ecosystem recorded more than $2 billion in trading volumes on average over the past two years.

LUNA trading volume comeback. Source: CoinGecko

But as LUNA prices plummeted in the morning between May 10 and May 13, trading volume surged as investors tried to cut their losses — ranging from $5 billion to $16 billion. At its peak, LUNA’s trading volume hit an all-time high of $16.15 billion on May 11.

Terra’s (LUNA) always high trading volume. Source: CoinGecko

Due to the various factors mentioned above, at the time of writing, LUNA has regained its trading volume and is trading at $0.00025. According to data from CoinMarketCap, crypto exchange Binance represents 68.26% of LUNA’s trading volume, followed by KuCoin at 9.52% and FTX at 1.13%.

Related: Crypto.com Unblocks Users, Returns Glitched LUNA Trades Earning 30-40x

On Friday, Crypto.com users expressed concern about the reversal of LUNA trades on the exchange’s mobile application.

Crypto.com CEO Kris Marszalek later revealed that an internal flaw caused the system to display incorrect prices, leading to countless investors cashing in on 30-40x profits.

As a result, Crypto.com temporarily blocked all users from trading. After a day of reviewing the alleged system flaw, Marszalek said “all user accounts have been re-enabled”.

As Cointelegraph reported, the company has offered $10 to its internal token Cronos (CRO) as a goodwill gesture to affected investors.