Terra Classic (LUNC) Price Surges Following Binance Announcement

Binance, the world’s largest cryptocurrency exchange, made a significant announcement on Monday regarding adjustments to leverage and margin tiers for certain crypto perpetual contracts. Among the affected contracts is the 1000LUNCUSDT perpetual contract, leading to rice in the price of Terra Classic (LUNC).

Maintenance Margin Update

According to the report, Binance has decided to raise the maintenance margin rate for positions ranging from 0 to 5000 on the 1000LUNCUSDT perpetual contract.

Read Also: Binance LUNC Burn Hits 40 Billion as Terra Classic Community Considers Burning Both USTC and LUNC

However, the leverage of 21-50x remains unchanged. This adjustment means that traders will now need to maintain a larger amount of LUNC in their deposit accounts in order to engage in trading activities involving the perpetual contract.

In addition to the changes made to the 1000LUNCUSDT contract, Binance also applied adjustments to leverage and margin tiers for some other crypto perpetual contracts.

Notable contracts affected include TOMOUSDT, MINAUSDT, YFIUSDT, KLAYUSDT, ZILUSDT, QTUMUSDT, ENSUSDT, KSMUSDT, ONTUSDT, and SUSHIUSDT. Furthermore, the maximum funding rate for these cryptocurrencies has also been modified.

Market Impact and Trading Activity

Short liquidations in both 1000LUNC and LUNC have been driving up prices as traders close their positions, according to data from CoinGecko. Remarkably, 1000LUNC perpetual contracts have dominated the trading volume on Binance, accounting for an impressive 47% of the market share within 24 hours.

As of now, LUNC is trading at $0.00006715, showing a remarkable 5% increase in value within the past day. The 24-hour low and high for LUNC are recorded at $0.0000641 and $0.0000676, respectively. Additionally, the trading volume has experienced a notable surge within the same 24-hour period.

Read Also: Google Bard Sets Terra Classic (LUNC) Price For November 30, 2023

Institutional Interest and Risk Management

Binance’s decision to increase the maintenance margin rate for LUNCUSDT perpetual contracts is primarily aimed at reducing the risk of liquidations. By enforcing higher requirements for LUNC holdings in traders’ deposit accounts, Binance aims to make it more challenging for traders to face liquidation in the event of a significant drop in LUNC’s price.

The positive response from LUNC traders indicates their favorable interpretation of Binance’s decision as a bullish signal. The fact that 1000LUNC perpetual contracts dominate the trading volume on Binance further suggests that professional investors exhibit a considerable interest in trading LUNC.

In summary, Binance’s decision to raise the maintenance margin rate for LUNCUSDT perpetual contracts is a significant development for LUNC. It showcases a strong interest in trading this cryptocurrency and, at the same time, contributes to the reduction of liquidation risks.

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