Terra Classic (LUNC) is one of the cryptocurrencies that the crypto community can never forget. The wild crash of this token is a major catastrophic story of the 2022 bear market. Launched by Do Kwon’s Terraform Labs in 2019, LUNC launched as a proof-of-stake (PoS) blockchain. From the crash, LUNC crashed from a price of $119.18 in April 2021, which has seen it struggle through. Will it rise again?
This article will analyze LUNC dynamics through current developments of the network and perform an analysis to determine whether it is a good time to invest in it.
History of the Terra Ecosystem
At the time of creation, the Terra protocol aimed at developing decentralized finance (DeFi) projects. The blockchain operated through a dual-token system consisting of LUNA and UST, its stablecoin. Following the collapse of the Terra ecosystem in May 2022, there was a rebranding of the blockchain, which was hard-forked into Terra 2.0. LUNA Classic token was a part of that rebranding, as the renamed original LUNA leftover.
Based on Do Kwon’s envisions, the Terra ecosystem was to be a blockchain that could be equivalent to the Visa payment system, having dApps and stablecoins in the mix. As such, everything was supposed to happen on-chain; payments, savings, and lending, which are the three pillars of personal finance. The ecosystem relied on algorithmic stablecoin TerraUSD (UST) to allow for scalability for global crypto adoption.
UST was working in tandem with Terra’s native LUNA cryptocurrency and was dynamically contracting and increasing its supply based on market needs. However, there was one problem: UST’s stability was tied to LUNA’s price, a volatile cryptocurrency. Once LUNA went down, UST quickly followed.
Terra’s wealth was concentrated in the Anchor lending protocol, offering artificial, unsustainable, and Ponzi-like 20% stablecoin yields. With investor drawdown from Anchor and LUNA’s price wobbles, the two pillars of the Terra ecosystem collapsed, wiping out investors’ life savings.
In the same month, Do Kwon came up with a recovery plan and the LUNC token.
LUNC Rebirth
In May, the new Terra blockchain was launched by Terraform Labs as the hard fork of the old one. Blockchain hard fork happens when new protocol rules are different enough to cause previous transactions (data blocks) to be invalid.
With Terra’s validators agreeing with Kwon’s hard fork proposal, they enacted new network protocols. Since its rebranding from LUNA to LUNC, the cryptocurrency has been worth less than one-thousandth of a dollar.
LUNC has been transformed into a meme coin for all intents and purposes, just like its newer LUNA iteration. As memecoins appear, it relies on exchange listings and social media engagement to exert positive valuation moves.
Binance Resumes Terra Classic Burn
Binance, the world’s largest cryptocurrency exchange by trading volume, has reportedly resumed the usual burn of the digital token LUNC. This move has been the utmost desire of the teeming Terra Classic community members. A recent move has been the incarceration of about 8.8 billion LUNC tokens worth $1.5 million.
The exchange saw the suspending of the usual LUNC burn following the emergence of issues related to the LUNC re-minting and burn tax. The community had to resolve all issues raised by the exchange to bring back its support. As such, the recent upgrade to the Terra Classic network made community members expect Binance to resume its voluntary LUNC burn since all its concerns have been addressed.
It is worth noting that the exchange has been the major contributor to the Terra Classic burn initiative.
This could serve as a bullish fundamental for the in-house investors and potential holders of LUNC tokens.
The Arrest of Do Kwon
From the crash, Do Kwon became a man of interest, wanted both in the US and South Korea in connection with the $40 billion crash of the firm’s cryptocurrency. Terraform Labs crash devastated retail investors around the world. On Thursday, there were reports that Police in Montenegro had arrested Do Kwon, based on reports by the country’s interior minister.
Federal prosecutors in New York indicted Kwon on fraud charges hours after the arrest. Since the arrest, the cryptocurrency has been performing well in trading volume, regardless of the price fall. The news of the arrest seems like a likely drive on the price.
LUNC Price Prediction: Technical Analysis
Terra Luna Classic (LUNC) is trading at $0.00012280, with a 24-hour trading volume of $42,759,034. This is a representation of a 0.72% price rise in the last 24 hours and a -1.83% decline in price in the past seven days. In the last 30 days, today’s price represents a -24.04% decline. With a circulating supply of 5.9 trillion LUNC, the cryptocurrency is valued at a market cap of $722,835,332.
The LUNC/USDT struggles under the 0.00014 level while it gains support near 0.00013. It is clear that there is no possibility of the price slipping further since the asset has tested the support severally.
LUNC has been trading below both the 50-day and 200-day moving averages, adding to some level of bearish sentiment. The current Relative Strength Index remains below the trendline and has been falling, which makes it remain speculation as to where the market may go.
Every indicator shows that the current LUNC outlook is bearish, followed by low volatility in its price. However, there is an outlook of an ascending triangle, which may be an indication of an upward trend. If the resistance level remains strong and breaks the $0.0001426 level, it may rally to $0.00017008 or even 0.00019785. If the price at $0.00019785 is broken, LUNC can rally to $0.00027542
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