Terra Luna Classic (LUNC) finds itself at a pivotal moment, currently stalled at a crucial support level around $0.000060. This consolidation phase follows a substantial 66% decline from its peak in December. While price action remains tentative, a notable surge in the burn rate of LUNC tokens is underway, adding a layer of complexity to the market dynamics.
Also read: LUNC Lives On. Terra Classic’s Utility and Burn Mechanism Explained
Terra Classic Burn Rate Sees Dramatic Increase:
Despite the price stagnation, the Terra Classic community has been actively reducing the token supply through Terra Classic Burn. In the past week alone, over 727 million LUNC tokens were destroyed, bringing the total number of tokens burned since inception to over 407 billion. A significant contributor to this effort was the Luna Foundation Guard (LFG).
This burned over 211 million LUNC and 1.7 billion TerraClassic USD (USTC) tokens. This burn mechanism aims to reduce the circulating supply, potentially creating upward pressure on the price, although its effectiveness remains to be seen.
Technical Analysis Points to Potential Downside:
From a technical analysis standpoint, LUNC’s position at a key support level suggests a battle between bulls and bears.
The formation of a descending triangle pattern, however, indicates a potential continuation of the downward trend. Should the price break below the current horizontal support level, the pattern suggests a possible price target of $0.000047, representing a further 22% decrease from current levels.
This technical outlook underscores the inherent volatility and risk associated with LUNC trading.
Proposal for On-Chain USDC Liquidity:
Adding another dimension to the LUNC ecosystem, a proposal has been put forward to introduce a phased approach for establishing on-chain liquidity for USD Coin (USDC). The stated objectives of this initiative are to improve on-chain liquidity, provide decentralized finance (DeFi) utility, reduce reliance on centralized exchanges, and create arbitrage opportunities. The success of this proposal could significantly impact LUNC’s future trajectory, potentially attracting new investors and use cases.
Related: LUNC on the Rise? Key Developments to Watch in 2025
LUNC’s current situation presents a mixed bag of signals. While the increasing token burn rate offers a glimmer of hope for price appreciation, technical analysis suggests potential for further downside. The proposal for on-chain USDC liquidity introduces another variable that could influence the future of Terra Luna Classic. Investors and enthusiasts should closely monitor these developments, as LUNC navigates this critical juncture.
