Terra Luna Classic Price Prediction – Has LUNC Bottomed Already?
The Terra Luna Classic price has risen by 3.5% in the past 24 hours, reaching $0.00030768. This level represents an 8% fall for LUNC in the past week but also a 56% rise in the last 14 days.
With the LUNC price also down by 28.5% in the past month, these varying percentages create a confusing picture for the altcoin, which has recently sunk despite a very strong early September. However, with Binance and other players supporting large-scale LUNC token burns, it’s very likely that it will witness further rallies in the coming weeks and months as its supply continues to fall.
Terra Luna Classic Price Prediction
Compared to early September, LUNC doesn’t appear to be doing too well. It rose as high as $0.00057449 on September 8, only to fall by 67.8% by September 26, when it stood at $0.00018478.
Fortunately, the LUNC price has, in fact, increased since this decline, with its current level representing a 66.5% increase since its low on September 26. So based on prices alone, LUNC bottomed at the end of last month.
Looking within a shorter timeframe, LUNC is down by 15% since reaching $0.00036234 on Sunday, October 2. As such, its current level is something of a bottom, and given that its price has just risen by 3.5% in the past 24 hours, it looks like it could be getting out of it.
Indeed, its relative strength index (in purple above) went from a low of 30 a couple of days ago to nearly 70 today. This signals a move away from oversold conditions to rising momentum, while its 30-day average is also climbing above its 200-day again.
There’s a good chance that these bullish technical indicators will be complemented by some good news for LUNC. In particular, it looks as though Binance is going to begin another burn of all fees it collects in LUNC, following its burn from the previous couple of weeks that resulted in some 5.8 billion LUNC (worth around $1.8 million) being destroyed.
Assuming that Binance’s burns become a regular occurrence, the market could see LUNC’s supply decrease quite significantly. Of course, this supply is currently at around 6.9 trillion, so Binance would have to complete a few more before its efforts have a real significant impact.
That said, some other promising news for LUNC has emerged today: KaJ Labs – the developer of Lithosphere (LITHO) – has announced that it will set aside $450 million in order to burn around 2.5 trillion LUNC.
This is significant, and if completed, the burn would reduce LUNC’s circulating supply by just over 36% (over a third). Assuming a proportional increase in LUNC’s price, it would go from $0.00030768 today to nearly $0.0005.
It’s likely that in combination with the Binance burns (and other burns that join the bandwagon), LUNC’s supply could shrink by more than 2.5 trillion over the next months. At the same time, it’s arguable that a 36% supply reduction would have an exponential effect on LUNC’s price, pushing it up by more than 36%, particularly if traders became increasingly bullish.
The Long View
Looking to the more distant future, some true-believing LUNC and Terra Classic supporters have begun claiming that failed stablecoin TerraClassicUST (USTC) will eventually regain parity with the US dollar.
This is highly optimistic, although it needs to be acknowledged that USTC has risen by 36% in the past 24 hours, while it’s also up by 560% since reaching an all-time low of $0.00601921 in June following its spectacular collapse.
If KaJ Labs does end up burning 2.5 trillion LUNC, with other exchanges joining Binance, it’s not totally out of the question that its supply could return to its former level. This was about 352.6 million in early April of this year before USTC fatally lost its peg with the US dollar.
The thing is, even if the market sees some massive LUNC burns in the coming months, it’s hard to imagine that anyone can really trust USTC as a stablecoin. Its crash was devastating for thousands of investors in May, and now that it has so dramatically broken from its peg, it’s very possible that most traders with genuine demand for a stablecoin will look elsewhere.
Because of this, it seems very unlikely that LUNC’s value will ever return anywhere close to its former all-time high of $119.18. That’s because its relationship and dynamic with USTC has been fundamentally severed.
Pre-collapse, LUNC was burned as more USTC was issued (and vice versa), meaning that the price of LUNC tended to increase as the market’s demand for the USTC stablecoin grew. But is the market really going to experience a genuine demand for more USTC?
1/ The prevailing peg pressure on $UST from its current supply overhang is rendering severe dilution of $LUNA.— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 12, 2022
The primary obstacle is expelling the bad debt from UST circulation at a clip fast enough for the system to restore the health of on-chain spreads.
This seems implausible. Making it seem even more implausible is the fact that Terra founder Do Kwon is a wanted man, with South Korean authorities issuing a warrant for his arrest in mid-September, as well as Interpol adding him to its Red List of wanted persons a couple of weeks ago.
Given the degree of legal scrutiny surrounding Terra, it’s again highly inconceivable that serious investors will be turning to USTC or LUNC in the way they had done before May of this year. In other words, a bet that LUNC will regain its ATH or USTC will regain $1 remains just that, a bet.
Nonetheless, it’s hard to deny that LUNC and USTC haven’t been turned into speculative playthings for traders hungry for easier (yet highly risky) gains in a bear market. LUNC has risen by 30,164% since crashing to an all-time low of $0.000000999967 on May 13, easily making it the best-performing top-100 coin in the period between then and now.
But what are the chances of it recording another 30,000% gain in the next five months? Pretty low, with another 30,000 gain meaning that it would rise to around $0.093.
Still, Binance and other players within the market have begun burning LUNC on a large scale, so it can’t entirely be ruled out that the altcoin will continue seeing big rises over the next few months. Even so, a return to more positive conditions within the wider market may see traders turn to more fundamentally sound coins.
Even now, some coins are seeing big rises, with presales proving one promising area of activity for return-hungry investors.
One particularly notable sale happening right now is being held by the Impact Project, which is selling its IMPT token at a price of $0.018. The Impact Project is an Ethereum-based marketplace for carbon credits, making it an interesting proposition for ESG investors or for anyone seeking the big gains that can come from a new coin being listed for the first time.
Either way, such coins, based on fundamentals, are arguably a safer proposition for the future than a coin whose business model and tokenomics have been fatally compromised.