The momentum in the price of LUNC saw a drop following the lawsuit filed on Thursday against Terra founder Do Kwon and TerraForm Labs, by the SEC in the U.S. District Court for the Southern District of New York.
“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,” said SEC Chair Gary Gensler. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors, ” he added.
Notably, LUNC’s price reacted negatively to the news, plummeting significantly in a few hours. At the time of writing, LUNC is trading for $0.0001677 per coin, showing a decline of over 4.5% in the last 24 hours.
Could LUNC be in Trouble?
The sentiment around the Terra Classic native token, LUNC, suddenly turned bearish even though Do Kwon and TerraForm Labs are no longer involved with the asset. Recall that Do Kwon abandoned LUNC after the project failed in May to launch a new token dubbed LUNA.
Subsequently, the now community-led Terra Classic project abandoned the TerraForm Labs infrastructure to become truly independent. Over time, several community-formed development groups including the Joint L1 Task Force, Terra Rebels, and TerraCVita emerged to paddle the LUNC boat.
However, indicators on the LUNC chart such as the Relative Strength Index (RSI) and Moving Average (MA) indicate that LUNC could be in for an intense downtrend. Particularly, LUNC’s RSI — the purple line — number is currently below 40, signaling a high selling pressure. Should the prevailing LUNC sell-off increase, such that the RSI falls below 30 then, LUNC could decline massively in the short term.
Related: Many Terra Classic Enthusiasts Don’t Believe LUNC Would Reach $1 by 2043, Recent Poll Shows
Correspondingly, LUNC’s 30-day moving average — the red line — is no longer showing signs of heading toward its 200-day average — the blue line on the chart. In retrospect, LUNC could be headed to the $0.00015 level if the key short-term support level of $0.000160 is broken.
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