YEREVAN (CoinChapter.com) — On Nov. 27, Terra’s USTC and LUNC tokens rallied substantially, helped by a slew of positive developments within their ecosystem recently. That includes a multi-million dollar capital injection to improve Terra’s liquidity and a community proposal that got passed.
Why Are Terra’s USTC, LUNC Prices Rallying Today?
Last week, Terraform Labs (TLC), the entity behind Terra (LUNA), injected $15 million worth of capital to enhance Bitcoin (BTC) and Ethereum (ETH) liquidity on its top decentralized exchanges, Astroport and Ura.
Since the announcement, LUNC’s price has jumped nearly 85%. In comparison, USTC has gone up by over 500%, indicating TLC’s commitment to revitalizing an almost-dead Terra ecosystem has generated excessive speculation around its tokens.
For the unversed: Terra collapsed dramatically in May 2022 after its algorithmic stablecoin UST lost its dollar peg. That resulted in a 99% valuation depletion in the market capitalization of Terra's native token, LUNA. Months after the destruction, a DAO community took over the Terra project.
The Terra community has launched a parallel project to Terraform Labs that backs LUNC and USTC tokens. More recently, the so-called Terra 2.0 proposed and approved significant proposals, such as the v2.3.0 upgrade and the decision to halt USTC minting, signifying a collective push toward the Terra ecosystem’s recovery and growth.
What’s Next for Terra Ecosystem Tokens?
USTC and LUNC tokens have reached their most overbought levels after the recent price rally.
Speaking of USTC first, the Terra token corrected over 15% from its record high of $0.075 to $0.063 on Nov. 27. Nonetheless, the price decline has not influenced its daily relative strength index (RSI) near 95.30 — reflective the token stands excessively purchased — to come down.
Simply put, Terra’s USTC has more room to decline in December 2023, with $0.051 as the primary downside target.
As for Terra’s LUNC, the token’s weekly timeframe chart reflects it may struggle near its $0.000122 resistance level.
As a result, its price may correct toward $0.000078, down 35% from the current price levels.
