Altcoins in the crypto space have been seeing a lot of volatility lately as major cryptocurrencies Bitcoin and Ethereum face resistances which hindered their growth. Luna Classic, the revival attempt of the Terra Luna ecosystem, is one of those tokens that is facing losses in the short term.
According to CoinGecko, the token has depreciated by 4% in the daily time frame which might be a sign that things might get bleaker for investors.
Previously known as Terra Classic, the old chain’s native coin is now known as Luna Classic (LUNC). Released in May 28 last year, it followed the establishment of the genesis block on the new chain that resulted from the fork.
LUNC, which was formerly known as LUNA, is a stablecoin that serves the same purpose as the original Terra Luna coin and maintains the value of the Terra Classic stablecoin, TerraUSD (UST).
Positive Developments Contradict Bears
The Twitter space for LUNC has been particularly bullish lately. KuCoin, one of the biggest exchanges in the market, has recently entered the Luna Classic chain as a validator. This is a complete turnaround in sentiment in Luna Classic.
One of the largest centralized exchanges #KuCoin has now entered the $LUNC chain once again as a validator 👀 pic.twitter.com/kAqtr4ANma
— Classy 🔮 (@ClassyCrypto_) February 8, 2023
Due to the massive staking of KuCoin on-chain, LUNC has reached almost 14% of the total supply being staked. This could signal a positive sentiment built around the ecosystem. Santiment is noting a strong development force supporting the LUNC bulls.
HUGE STAKING EVENT!🚀
KuCoin is BACK With 47.8 BILLION $LUNC Delegated Taking the #5 Spot & Pushes the Total #LUNACLASSIC Staked to 940B at 13.69%🔥
1 TRILLION #LUNC Staked! pic.twitter.com/wR69BtMCyw
— The Millennial Market (@TMMcryptos) February 8, 2023
Since October 2022, the ecosystem has been experiencing strong development activity, reaching a peak last month, January 15th.
UST, Terra Luna’s stablecoin that made the crypto industry lose billions, is also being planned to be re-pegged to $1. If this re-peg of the stablecoin is successful, it might help bring more bullishness on LUNC. The burning of the token should also give a boost as it nears 40 billion LUNC burnt.
Rejection At $0.0002091 Drives LUNC Downwards
Bearish or not, the token’s current rejection certainly had an effect on LUNC’s ability to break through the current resistance level at $0.00020916. However, the token’s support at $0.00016897 might hold even as the bearish momentum continues.
For the token to continue its climb, LUNC should close above $0.00016897 support as a break on this support might make the token revert to $0.00015115. Investors and traders should also monitor the token’s correlation with major cryptocurrencies.
LUNC total market cap at $1 billion on the daily chart | Chart: TradingView.com
At the time of writing, it has a strong correlation with Ethereum which has currently entered a consolidation period above $1.6k. If ETH bears break through this support, we might see LUNC follow the top altcoin.
LUNC bulls should watch internal and external developments as this could either give confidence or spark skepticism for token’s price movement.
For now, investors and traders should focus on strengthening the token’s current support with a possible target above $0.00020916. But LUNC bulls should brace for short to medium term pain as the token has a chance to decline in the coming days.
-Featured image from Telegaon