Among the many cryptocurrencies trading at the bottom of their respective charts, due to the prevailing bear market is the Terra Classic native token, LUNC.
The Terra-related token which already toppled as a result of the May USTC de-peg incident has been largely affected by the current crypto winter, inspired by the implosion of the FTX exchange.
At the time of writing, Terra Classic (LUNC), ranked as the 42nd largest cryptocurrency by market capitalization, is trading for $0.0001643 per coin, as shown on Coinmarketcap.
Considering that the FTX meltdown effect is yet to settle and investors’ crypto sentiment remains bearish, LUNC has declined in price by over 11% in the past 7 days.
Although the Terra Classic native token has also appreciated by over 9% in the past 24 hours, some indicators on LUNC/USDT chart show that the embattled token could plummet even further in the short term.
Particularly, the Relative Strength Index (RSI) reads 36.64, at the time of writing. This implies that selling pressure on Terra Classic is still on the high side, signaling more dump until the trend reverses.
On the other hand, LUNC is getting closer to touching its closest support of $0.00008887, as seen on the chart. Peradventure, this first support fails to hold then, the second support zone which is at $0.00005214 would be the last hope for LUNC not to plunge deeper. But if both support zones fail to hold, then LUNC could go below its all-time low of $0.00001675.
Fundamental Factors Say LUNC to $1 in the Next Bull Run Is Likely
The crypto market is often full of surprises and uncertainties, which is why no one can predict 100% the movement of crypto tokens. Technically, if the above-mentioned support zones hold then, LUNC could rebound to begin a new uptrend season.
But looking at the many fundamental factors surrounding LUNC, there is a possibility for the token to hit the $1 mark in the future. First, the optimistic Terra Classic community continues to burn LUNC in large volumes daily, as they aim at reducing LUNC’s circulating supply to 10 billion units only.
While most of the burns are done by anonymous wallets sending LUNC tokens to the official burn address, the 0.2% tax burn implementation is another way the Terra Classic community removes LUNC from circulation. CZ’s Binance, which is the exchange with the highest LUNC burn contribution, plans its next Terra Classic burn event on December 2.
Also, many developments abound in the Terra Classic community including the Terra casino project, and the launch of a DEX on Terra Classic while there is also a proposal to re-open three IBC channels on the LUNC chain.
One of the most notable moves was that of Tobias Andersen, who published a proposal aimed at potentially repeg USTC, the stablecoin tied to LUNC price historically.
As promised @ https://t.co/vPUWl8ToTC
— Tobias Andersen (@ZaradarTR) October 9, 2022
The proposal would bring about a system of ‘quantitative tightening’ that will increase the burn taxes on both USTC and LUNC. It would also increase interest rates and lock-up periods for staking.
Theoretically, the proposal will lead to the removal of a huge amount of USTC and LUNC from the circulating supply, which would result in an increase in the value of both assets.
T R I L L I O N S!
— Crypto King 👑 (@CryptoKing_NFT) November 21, 2022
It should be noted that this proposal has not been set in motion in the Terra Classic community. However, after it was published in mid-October, LUNC saw a rapid surge in price, indicating that a hope for the future of both assets.
To make the dream of taking LUNC to $1 per coin a reality, there has to be a massive burn of tokens. And considering the current burn rate, 0.2% tax is clearly not enough.
That’s why LuncTech recently said, “We need to reduce the LUNC circulating supply to 10 billion if you all want to see $1 per LUNC. We need way more burn everyday and 0.2% surely not working LUNC community. We need to increase that to 1.2% or more to see the circulating supply to 10 billion anytime soon.”
We need to reduce the #LUNC circulating supply to 10 billion if you all want to see $1 per #LUNC . We need way more burn everyday and 0.2% surely not working #LUNCcommunity . We need to increase that to 1.2% or more to see the circulating supply to 10 billion anytime soon 🔜
— LuncTech (@LuncTech) November 19, 2022