YEREVAN (CoinChapter.com) — On Dec. 4, the Terra Classic LUNC token price hit the one-year high of $0.00025 after a whopping 75% intraday rally. In detail, the surge brought LUNC’s December gains to 130%, parallel to Bitcoin’s rally above $40,000 for the first time since April 2022.
Will Terra Classic LUNC Price Uptrend Continue?
According to the Terra Classic token LUNC price chart, the coin could experience a cool-off in the short term. LUNC’s relative strength index (RSI; purple graph at the bottom) charted above 80, which could indicate a profitable market exit point.
Judging by the intraday 7% correction from the $0.00027 peak, the cool-off has already started.
However, the correction will likely be short-lived. In detail, the surge in trading volume shows that investor interest has not waned yet and could take LUNC on another leg up after the short-term cool-off. Notably, the LUNC trading volume (red wave) increased to its highest peak since September 2022, resulting in a market cap of $1.5 billion.
If the uptrend continues, a likely target will stand at $0.00032, or another 23% higher than the current value. Meanwhile, before assessing the possibility of another leg up, it is crucial to look at the reasons behind the surge, to determine if the latter can continue.
Reasons behind Terra Classic Surge
The Terra Classic LUNC price surge put the coin in the leading position among daily gainers. As mentioned, Bitcoin’s (BTC) uptrend above $40,000 was one of the largest contributors to the token’s rally. However, the recent surge in LUNC price can also be attributed to a combination of factors that have revived investor interest and confidence in the Terra Classic ecosystem.
TerraClassic Foundation data highlighted a significant increase in the number of transactions on the Terra network, reaching nearly double the previous month’s daily average. Additionally, there was a notable increase in the proportion of LUNC tokens staked, reaching 15% of the total supply.
This surge in network activity and staking indicates a growing positive sentiment from users towards the Terra Classic ecosystem.
LUNC Token Burn
Meanwhile, a boost from Binance and Mint Cash also helped LUNC along. In detail, on Nov. 27, Binance Futures listed the USTC Perpetual Contract for trading, offering up to 50x leverage, which significantly boosted the Terra ecosystem.
Furthermore, Mint Cash, a Bitcoin-backed payment system, announced a revival plan for the Terra ecosystem, including collateralizing the stablecoin with Bitcoin. This plan could rebuild the system to deliver what the original Terra stablecoin failed to achieve. The combination of Binance’s futures listing and Mint Cash’s revival plan resulted in a strong surge for USTC and Terra Classic LUNC prices.
Additionally, on Dec. 1, Binance announced the burning of close to 4 billion LUNC tokens, creating a scarcity in supply that potentially boosted the price of Terra Classic tokens. Binance has burned over 43 billion LUNC tokens, comprising the most community-driven burn.
