Terra (LUNA<\/a>) emerged as one of the best performing financial assets in February, a month mired by geopolitical conflicts and their negative impacts on the crypto market.<\/p>\n LUNA’s price surged by a little over 75% to reach $91.50 at the month’s UTC close. In comparison, the percentage performance of other top tokens, mainly Bitcoin (BTC<\/a>) and Ether (ETH<\/a>), in the same period came out to be around 12.25% and 9%, respectively.<\/p>\n Interestingly, most of LUNA’s gains<\/a> in February surfaced on the month’s last day. The Terra token jumped 26% on Feb. 28, in part due to similar upside moves elsewhere in the crypto market. For instance, BTC and ETH rose<\/a> 14.50% and over 11.50%, respectively, on the same day.<\/p>\n While still positive at 0.09, LUNA’s correlation with Bitcoin has come off lately after hitting 0.81 on Feb. 21, data from TradingView shows. A correlation of 1 means that two assets are in lockstep, while 0 shows that their price moves independently.<\/p>\n Terra’s LUNA\/BTC pair also showed its growing valuation against the top cryptocurrency. <\/p>\n In detail, the LUNA\/BTC pair rose by over 56% to 21,171 satoshis\u00a0in February, suggesting traders sought hedge in the Terra token as Bitcoin’s correlation with a bearish stock market grew<\/a>, reaching 0.70 earlier this year.<\/p>\n As to why traders appeared to have considered LUNA as their interim safe haven in the first place, the answer might lie in Terra’s token economics.<\/p>\n Data fetched by analytics platform Smart Stake showed<\/a> that Terra protocol burned 29 million LUNA tokens worth $2.57 billion recently. That happened as the supply of TerraUSD (UST), a stablecoin backed not by the U.S. dollar but LUNA, increased\u00a0from around 11.26 million on Feb. 1 to almost 12.92 million on Feb. 28, marking an increase of nearly 14.75%.<\/p>\n Traders consider an increasing UST supply a bullish catalyst for LUNA, mainly because of the so-called\u00a0UST-LUNA token model. In detail, Terra preserves UST\u2019s peg of USD through an elastic monetary policy. So when the value of UST goes above $1, Terra incentivizes its users to burn LUNA and mint UST.<\/p>\n But when the UST supply contracts, LUNA valuation decreases due to a slowdown in the burning mechanism. All and all, LUNA’s valuation tends to rise alongside UST’s supply.<\/p>\n On Feb. 22, the Luna Foundation Guard (LFG) \u2014 a nonprofit organization supporting the Terra blockchain ecosystem, announced<\/a> that it had raised $1 billion in a LUNA token sale round led by Three Arrows Capital, a venture capital firm backed by Ethereum-skeptic Su Zhu and Jump Crypto, a trading group known for assisting Solana’s cross bridge platform Wormhole<\/a> in replenishing their stolen $300 million.<\/p>\n 1\/ The long awaited [REDACTED] 3 is here!<\/p>\n The Luna Foundation Guard (LFG) has closed a $1 billion private token sale to establish a decentralized $UST<\/a> Forex Reserve denominated in $BTC<\/a>! <\/p>\n \u2014 Terra (UST) Powered by LUNA (@terra_money) February 22, 2022<\/a><\/p><\/blockquote>\n LFG revealed that it would use the proceeds to build a “UST Forex Reserve,” raising prospects of boosting the stablecoin’s supply by another billion-dollar worth of LUNA-backed tokens.<\/p>\n LUNA’s price has risen by nearly over 90% since the LFG’s announcement. In contrast, the total market capitalization of all the cryptocurrencies combined has rallied by just 13% in the same period, underscoring that crypto traders have been flocking into the Terra market.<\/p>\n Terra’s technical outlook looks skewed to the upside owing to an ongoing “bull flag” breakout move.<\/p>\n Bull flags are bullish continuation patterns<\/a> that appear when the price consolidates lower inside a descending channel after a strong move upward. Eventually, it breaks out of the channel range to the upside, with a price target ideally at length equal to the size of the upside move that preceded the bull flag formation.<\/p>\n LUNA appears to have entered the final phase its bull flag setup, as shown in the chart below. It now eyes a run-up toward $120, an all-time high for Terra if achieved.<\/p>\n On the flip side, LUNA’s volumes on the three-day chart appear weak, showing the ongoing upward retracement remains less convincing to traders. Its volume profile also shows little historic activity above $70.<\/p>\nLUNA decouples from the crypto market<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/af49f974-e3c0-4a8f-8d2f-c7990ade8262.png\")
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/39a33015-71df-4c74-9654-802e53c6e393.png\")
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/2460066d-ded3-4409-a4d9-b886e60fe28f.png\")
29M Terra tokens destroyed<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/e8f4c80e-6bf1-4596-a801-561b518bfb3b.jpg\")
\n
What’s ahead for LUNA?<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/09837326-85e6-4c9a-a3ef-426bd4186fdc.png\")
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-03\/f57ab9d0-1baf-445d-a615-0729f78570df.png\")