LUNA Rallies 5.54% Amid Selloff But Still Loses 36% on the Year

LUNA, the token of the Terra ecosystem, rose by 5.54% within 24 hours on FEB 6 2026, reaching $0.0609, though it remained under significant downward pressure over longer timeframes. Over the past seven days, the token dropped 7.72%, and it has declined by 7.99% in the last month and 35.99% in the last year. These figures highlight a broader bearish sentiment in the cryptocurrency market, where risk-off behavior has intensified amid macroeconomic uncertainty and regulatory scrutiny.

Broader Market Deterioration Weighs on Altcoins

The selloff has affected nearly all major tokens, with Bitcoin sliding toward a 15-month low and Ethereum and Solana also posting sharp declines. XRP, in particular, saw a steepest one-day drop of over 17% as $46 million in leveraged long positions were liquidated, pushing its market capitalization to $75 billion. The widespread pullback has been exacerbated by macroeconomic factors, including Federal Reserve policy uncertainty and a rising U.S. Dollar Index, which has tightened global financial conditions.

Bitcoin’s slide to $64,000 alone triggered more than $3.2 billion in realized losses, according to on-chain data. This level of distress reflects a broader capitulation across crypto markets, driven by fears of overleveraged positions and deteriorating momentum in tech and AI sectors.

Investor Sentiment Hits Multi-Year Lows

Crypto market sentiment has fallen to its lowest level in over 3.5 years, with the Crypto Fear and Greed Index hitting a reading of 9—indicating an extreme fear environment. This marks the lowest level since the collapse of the Terra Luna ecosystem in 2022. Analysts attribute the heightened fear to spillovers from global bond market volatility, geopolitical tensions, and the rising U.S. dollar, which has squeezed risk assets.

Options traders have also moved defensively, paying steep premiums for downside protection. Bitcoin’s 7-day and 30-day 25-delta skew levels have fallen below -28 and -24, respectively, showing a significant shift toward bearish positioning.

ETF Flows Offer Limited Support Amid the Selloff

Despite the sharp price declines, spot ETFs for XRP have continued to attract net inflows. Since their launch in November 2025, XRP ETFs have drawn over $1.2 billion in cumulative inflows. This week alone, they added $24 million, signaling continued institutional interest despite the token’s price weakness. In contrast, Bitcoin ETFs recorded roughly $545 million in outflows in a single day, indicating a divergence in institutional positioning.

However, these inflows have not been enough to cushion the broader selloff. Even with recent regulatory wins, including a Luxembourg-based Electronic Money Institution license, Ripple’s XRP price failed to stabilize, underscoring the dominant influence of macroeconomic trends and market positioning over fundamental developments.

LUNA’s Short-Term Gains Amid Broader Downturn

Despite the broader bearish climate, LUNA managed a modest 5.54% gain in the 24-hour period ending FEB 6 2026. This uptick is likely driven by algorithmic rebalancing and short-covering, as well as a brief relief rally in the altcoin segment amid Bitcoin’s sharp decline. However, the token’s 7.72% weekly loss and 35.99% annual decline underscore the structural challenges facing the Terra ecosystem and its ability to recover market share in a tightening risk environment.