- In less than two weeks, Terra Classic (LUNC) surged by over 300% as one of the best performers in the top-cap market, but it has since lost its momentum and started retracing.
- Despite the dip, LUNC trades 110% higher than it did a month ago, but technical indicators like the Moving Average Convergence Divergence have flipped bearish.
Terra Classic (LUNC) has been tearing the charts in the past two weeks, surging by over 300% to set a new yearly high above $0.00022. However, it has since lost momentum and has retraced by over 40% as analysts predict which way next for the cryptocurrency.
At press time, LUNC is trading at $0.0001717 for a $1 billion market cap, the 67th highest in the market ahead of established projects like Axie Infinity and Decentraland.
In the past day, it has dipped slightly by 3.12% and by 15% in the past month from $0.0002 as the market soured. However, zooming out, the token is one of the best performers this month. Since mid-November, it has gained 113% and in the past 12 days, it has surged over 300%.
Among the factors that pushed the token to new highs was an anticipated airdrop of LUNC and its sister token, USTC, by Mint Cash, a platform developed by ex-Terra programmer Daniel Hong. A recent proposal by the community to burn 800 million USTC also stoked confidence in the token’s future and brought a bevvy of investors into the market. But with a circulating supply of 5.83 trillion, this burn might not make the biggest difference.
However, the momentum has shifted since it peaked at $0.00027. It reversed a steady pullback on December 10 but the upward trajectory didn’t last long. It has retraced since as some of its key technical indicators flip bearish.
The token’s relative strength index (RSI) remains above the 50-point mark at press time, but it has progressively dipped in an indication of the continued weakening of the token’s earlier momentum. An RSI above 50 is considered bullish, but if it hits the 70-point mark, an asset is likely overbought and is bound to dip.
What’s Next for Terra Classic (LUNC)?
Terra Classic’s weakening market movements are reflected in other indicators. One of these is its open interest, which has been dropping for the past week as prices started falling. In the derivatives market, a dip in an asset’s open interest alongside its price is an indication that holders are being forced to liquidate their positions, and this tends to set the stage for a bigger dip.
The data supports this; in the past day, about $100,000 worth of positions were liquidated. Of these, the long holders accounted for 77%, a majority of which was on OKX. The funding rate, on the other hand, has remained consistent over the past week, according to data from Coinanalyze.
Other indicators flipped bearish more than a week ago, and LUNC has been fighting against them. The Moving Average Convergence Divergence (MACD) turned around on December 5 to indicate an upcoming price reversal, while the Fibonacci retracement ratio suggests LUNC should be trading around $0.0001735.
