Terra Classic (LUNC), the token at the center of the infamous TerraUSD (UST) crash earlier this year, has defied expectations with a 30% surge in the past week. However, this bullish momentum faces potential roadblocks, leaving investors wondering if the rally can be sustained.
Despite the price increase, social media buzz paints a contrasting picture. While LUNC enjoys growing popularity, on-chain data from Santiment reveals a concerning trend: negative weighted sentiment. This suggests that a significant portion of the market remains bearish on LUNC’s long-term prospects.
Technically, the picture is mixed. The Moving Average Convergence Divergence (MACD) indicator points toward a bullish trend, but the Relative Strength Index (RSI) dips slightly, hinting at potential challenges. Additionally, a large number of LUNC positions were liquidated at $0.000086, suggesting a possible price correction in the near future.
However, there are glimmers of hope. Binance, a major cryptocurrency exchange, has been actively burning LUNC tokens, which reduces supply and can theoretically drive prices up. Additionally, the derivatives market shows optimism, with Coinglass data indicating more long positions than short positions, suggesting investor confidence in a price increase.
A crucial test awaits LUNC as it grapples with resistance at its current price point. Overcoming this hurdle is essential for the rally to continue.
Meanwhile, a split login update planned for Terra Classic offers some optimism for investors. This could potentially improve the user experience and attract new participants.
Sister token Terra Luna (LUNA) has also joined the party, experiencing an 18% gain over the past week. Notably, a recent court order in Terraform Labs’ bankruptcy proceedings has authorized the reopening of the Shuttle Bridge, allowing for the redemption of wrapped assets. Additionally, a substantial amount of LUNA tokens will be burned, potentially mirroring the supply reduction efforts seen with LUNC.
While Terra Classic’s rally is encouraging, overcoming technical hurdles and negative market sentiment will be crucial for its long-term success. Investors should closely monitor these factors and the upcoming split login update to make informed decisions.