The price of Terra Luna Classic (LUNC) remains under pressure this week, mirroring the trends seen in Bitcoin and other altcoins.
LUNC at Key Support
LUNC has dropped to a critical support level of $0.00010, marking its lowest point since December 20 of last year. From its December high, the cryptocurrency has lost 42% of its value.
Token Burning as a Potential Catalyst
One factor that could contribute to LUNC's price recovery is the ongoing token burning, which has accelerated over recent months. According to data from LUNC Metrics, over 397 billion tokens have been burned since May 2022.
In the last week alone, 341 million tokens were removed from circulation, with a record burn of over 686 million tokens occurring on January 10. Binance remains the largest contributor, having burned nearly 70 billion tokens. Other significant contributors, such as the DFLUNC Protocol and LunaticsToken, have burned 2 billion and 1.9 billion tokens, respectively.
Token burning reduces LUNC's total circulating supply, now at 6.50 trillion tokens. In theory, reducing the supply should increase the value of the remaining tokens.
Staking Brings Additional Positive Signals
In addition to token burning, investors have focused on staking. The staking ratio has increased to 15%, amounting to 981 billion LUNC tokens, compared to last week's 14.8%.
A higher staking ratio indicates fewer tokens available for sale on the market, potentially reducing selling pressure. These positive metrics could support LUNC's price recovery once the ongoing sell-off ends.
LUNC Price Analysis
The daily chart shows that LUNC peaked at $0.0001790 in December but has since lost some of those gains, dropping to its current level of $0.00010. This decline is linked to the broader weakness in the cryptocurrency market.
The price broke below the critical support level at $0.0001054, corresponding to the neckline of a small double-top chart pattern. Additionally, LUNC has moved below both the 50-day and 200-day moving averages.
On the positive side, the token has formed a "cup and handle" pattern, a bullish continuation indicator. The ongoing pullback is likely part of the handle formation. If LUNC holds above the key support level at $0.00009060, a rebound could be possible.
Potential Recovery Scenarios
Bullish Scenario: If LUNC manages to bounce back, the first target would be the $0.000122 level, followed by the $0.0001310 level, which corresponds to the top of the cup formation. Reaching December’s high of $0.0001790 would represent a 73% increase from the current price.Bearish Scenario: If the price drops below the critical support of $0.00009060, further declines could damage the chances of recovery.
These metrics suggest that Terra Luna Classic has the potential to rebound, provided the broader cryptocurrency market stabilizes.
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