Terra Classic price recovery rally hiccups as LUNC meets key barrier amid USTC related hype
- Terra Classic price breached the $0.00011495 key roadblock with an intra-day high of $0.00012900, but the breakout proved premature.
- With LUNC still broadly bullish, the price could take another 15% swing at the key barrier amid abounding USTC hype.
- It comes after Luna Classic Labs acquired 25.6 million USTC worth about $500,000 as part of its Treasury Reserve Policy.
- The bullish thesis will be invalidated upon a break and close below $0.00008392 level.
Terra Classic (LUNC) is on a recovery rally, ploughing back to recover the ground lost after a steep fall as the price action consolidated within a descending parallel channel. The $0.00005234 support floor came into play, breaking the fall and providing the launchpad for a recovery.
Also Read: Terra Classic community ends minting of USTC tokens, opens doors to token burn
LUNC price booms on key Terra Labs investment
In a recent announcement, an official partner of Luna Classic Labs identified as Trader QT revealed on X that Luna Classic Labs had acquired a total of 25.6 million TerraClassicUSD (USTC) worth about $500,000. The acquisition was part of its Treasury Reserve Policy, with every USTC bought at an average purchase price of $0.021.
I can confirm that today, in an initial strategic investment, Luna Classic Labs has purchased approximately 25.6m $USTC for $500k in accordance with its Treasury Reserve Policy, at an average price of approximately $0.021 per $USTC.
— Trader QT (@0x_Ears) November 26, 2023
The purchase inspired a 300% rise in USTC price, with LUNC, its sister token, rallying along to send Terra Classic price almost 50% north. With this, it erased the losses that had been recorded over the past week, setting the price on a path to retest new price levels towards the close of November.
Generally, the surge reiterates the effort of LUNC and USTC communities in bringing enhanced value to both assets by means of upgrades and other strategies, including token burning.
Unfortunately, after the announcement, Luna Classic Labs received a message from US regulators containing cease and desist action regarding the USTC investment. This was a shock to the ecosystem, which committed to seeking legal advice on resolving it. Notwithstanding, both LUNC and USTC networks remain committed to growth.
Terra Classic price recovery rally hiccups
Terra Classic (LUNC) is up almost 60% in the month, focused on a recovery rally that has seen the cryptocurrency shed a zero. However, the $0.00011495 resistance level has limited the upside potential of the altcoin, and now bulls are strategizing for the next breach attempt after LUNC was overbought.
Increased buying pressure above current levels could see Terra Classic price extend, making a second attempt at the aforementioned barrier, potentially clearing the equal highs at $0.00011495. In a highly bullish case, the gains could extend for the price to test the $0.00012000 psychological level and in highly bullish cases, extend to tag the $0.00013000 level. Such a move would constitute a 30% climb above current levels.
The Relative Strength Index (RSI) above 70 shows LUNC is overbought, which explains the current stagnation and looming pullback as bulls look to refresh. Traders with long positions may consider keeping them open, at least for now, as the RSI could bounce above 70. A break and close below 70 would be the ideal signal to book profits.
Similarly, the Awesome Oscillator (AO) is showing green histogram bars standing strong in the positive territory. This shows the bulls are leading the market.
LUNC/USDT 1-day chart
On-chain metrics to Terra Classic support bullish outlook
The social volume and social dominance metrics support the bullish outlook for Terra Classic price, showing the share or percentage of LUNC mentions on crypto-related social media is rising, relative to a pool of other popular projects online.
LUNC Santiment: Social volume, Social dominance
The volume of stablecoin deposits was also on a broad climb until late October, superseded by increased Tether (USDT) stablecoin market capitalization. This points to an increase in the volume of fresh capital into the LUNC market, which adds credence to the bullish thesis.
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LUNC Santiment: Active stablecoin deposits, USDT marketcap
Further, the network has also been keen on development activity, with this metric showing a consistence climb. It points to development events in the LUNC ecosystem as indicated in the project’s public Github repository,
LUNC Santiment: Development activity.
However, with profit booking standing as the biggest obstacle to the upside potential of Terra Classic price, investors who bought LUNC during the November 21 dip are likely to cash in for 45% profit. This cohort of traders pulling the sell trigger could send Terra Classic price south, breaking below the immediate support at $0.00009706, or lower, the $0.00008392 support level.
In the dire case, the slump could see Terra Classic price invalidate the bullish thesis by slipping below the $0.00007315 swing low.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
