Wednesday, May 29, 2024
HomeCryptocurrencyBinance Terra Classic Burn: Potential Impact on LUNC Price in May

Binance Terra Classic Burn: Potential Impact on LUNC Price in May

Binance, the world’s largest cryptocurrency exchange, has been a strong supporter of the Terra Classic ecosystem since the crash in May 2022. This backing comes in the form of a monthly burn mechanism where Binance allocates a portion of LUNC trading fees to burn tokens, permanently removing them from circulation and reducing overall supply.

Since its inception in 2022, Binance’s LUNC burn program has played a significant role in attempting to revive the token’s value. According to Luncmetrics, as of April 2024, the exchange has incinerated over 57.66 billion LUNC tokens, representing 51.9% of the total LUNC burned by the entire community.

Read Also: Google Bard Predicts Terra Classic (LUNC) Price Should Bitcoin Hit $200,000 After Halving

The most recent burn, the 20th iteration of the program, saw the removal of 4.17 billion LUNC tokens, equivalent to $722,630 based on March’s trading volume surge.

Market Downturn Impacts LUNC Trading Activity

However, the broader crypto market correction in April 2024 has significantly impacted LUNC’s trading activity. Daily trading volumes have plummeted compared to March’s highs exceeding $100 million. This decline coincides with a price drop from over $0.0002 to its current price of $0.0001068, with the market capitalization shrinking from over $1 billion to around $620 million.

Despite the community’s efforts and the recent rejection of a controversial proposal, April’s average daily trading volume is around $30 million, falling below the number recorded in February. This significant drop in activity translates to a potential decrease in the amount of LUNC burned in the upcoming batch.

A Modest Burn for May

Considering the lower trading volume in April, Binance might end up burning between 1 billion and 1.5 billion LUNC tokens during the 21st iteration of its program, scheduled for May 1, 2024. This estimation reflects the reduced trading activity compared to the previous month.

Read Also: Terra Classic Price Prediction: LUNC Chances of Breaking Out Of Current Consolidation

Can Terra Classic (LUNC) Recover? 

Closely monitoring trading volume and derivatives activity is crucial for gauging LUNC’s future price movements. While some experts predict a potential rebound, the conditions for such a recovery remain unclear. Increased trading volume and a rise in user activity would be positive signs for LUNC’s price trajectory.

<

The burn program will also play a crucial role. Although Binance may not burn as many tokens as it often does, its continued commitment is invaluable, and future burns can improve LUNC’s long-term prospects.


Follow us on Twitter, Facebook, Telegram, and Google News

Solomon Odunayo
Solomon Odunayo
Solomon is a trader, crypto enthusiast, and analyst with over four years of experience in the industry. He strongly believes that crypto assets and the blockchain will continue to gain prominence. At TimesTabloid.com, he focuses on news, articles with deep analysis of blockchain projects, and technical analysis of crypto trading pairs.
RELATED ARTICLES

Latest News & Articles