Terra Classic (LUNC) Surges Over 10% in a Day: Bullish Sentiment Returns?

Terra Classic (LUNC), the original chain of the collapsed Terra ecosystem, defied broader market trends today with a remarkable price surge of over 10%. This positive move has fueled speculations about a potential comeback for the embattled token, prompting renewed interest from investors and traders.

Top Reasons Behind the LUNC Price Gain

USDC and axlUSDC Gas Fees

Recent implementation allowing users to pay gas fees in stablecoins like USDC and axlUSDC is seen as a major step towards improving the network’s usability and attracting broader adoption. This move potentially mitigates concerns about LUNC’s volatility for everyday transactions.

LUNC Burning Initiatives

Continued LUNC burning activities, including the 1.2% transaction tax burn and community-driven initiatives, contribute to reducing the token’s overall supply, potentially leading to price appreciation through scarcity. In a significant move, Binance burned 2.1 billion LUNC tokens, bringing their total burn to over 50 billion. This large-scale effort by the Terra Classic community aims to reduce the circulating supply, potentially pushing the LUNC price upwards in 2024 as it nears the 100 billion burn milestone.

Terra Classic Ecosystem Developments

Ongoing development within the Terra Classic ecosystem, such as the launch of new DeFi protocols and dApps, is generating positive sentiment and fueling hopes for future utility and growth. The Terra Classic community has approved a development proposal by Genuine Labs, which specializes in Cosmos stacks. This proposal aims to contribute to the improvement of the Terra Classic ecosystem, with a focus on integrating and enhancing IBC Hooks and Packet Forward Middleware (PFM) features, among other technical enhancements.

Short Squeeze Speculation

Some analysts suggest a potential short squeeze might be contributing to the price increase. As the price rises, short sellers might be forced to buy back their borrowed LUNC, further pushing the price upwards.

LUNC/USD Technical Analysis

Despite the recent uptrend, LUNC/USD remains in a downtrend on the larger timeframe. However, short-term technical indicators show signs of bullish momentum:

• MACD: The Moving Average Convergence Divergence (MACD) indicator is nearing a potential bullish crossover, suggesting a shift in momentum towards buyers.
• RSI: The Relative Strength Index (RSI) is currently around 60, indicating neither overbought nor oversold conditions, leaving room for further upside potential.
• Resistance Levels: Key resistance levels to watch include $0.00011 and $0.00012. A decisive break above these levels could signal further bullish continuation.