Last week, the world’s largest centralized crypto exchange, Binance, announced that it would support the terra community’s plans to reduce the supply.
According to the exchange, their plans were to implement a burn mechanism that would collect trading fees on LUNC spot and margin trading pairs, and then send them to a burn address.
For clarity, ‘burning’ cryptocurrencies involves sending them to a ‘burn address’ that isn’t controlled or owned by any user. Tokens sent to this address become lost forever, and contribute to reducing the total supply of the token. In turn, reducing a token’s supply can do a lot to increase its price.
A day after this announcement (Tuesday last week), Luna jumped 55% from $0.00018 to $0.00031.
Binance accounts for nearly 55% of the token’s trading volume and has prompted calls on Twitter to other exchanges like Robinhood, Gemini, and Coinbase to list LUNC as spot and margin offerings to their customers.
LUNC In The Charts
LUNC has managed to keep its head above the $0.0003 resistance.
After suffering extremely bearish conditions from the 9th of September to the 26th, the price of LUNC shot up and formed what now appears to be an ascending channel, where the price of the cryptocurrency appears to be consolidating.
The price of LUNC is currently at the lower support and is testing the $0.000315 level. The bulls are expected to defend this level and even push back up against the bears.
If this happens, we may see the price of LUNC rally up to the $0.00038 level or even a breakout to the upside in another 32% spike for LUNC this week.
Conversely, if the support around $0.000315 fails to hold, we may see a breakdown and the price of LUNC trending lower to retest the support around $0.000288.
On the RSI, the price of LUNC currently shows slightly oversold conditions at the 45.8 level, pointing towards a possible bounce off the lower support.
Volatility On The Terra LUNC Pair
The intra-day volatility on LUNC appears strong and seems to be keeping this up.
In the correction from its $0.00037 high over the last day, the price of LUNC is down 9% according to CoinMarketCap.
LUNC has bounced twice off the $0.000313 level and appears to be trying to break through the resistance at the $0.00032 level. As mentioned earlier, the intra-day volatility on LUNC appears strong. If LUNC manages to break through this $0.00032 support, we may see a rally upwards over the next few days to the $0.000388 level.
Can This Volatility Redeem Terra?
The answer is simple. Nobody knows.
One thing, however, is for sure: The $1 is still very far away. At the current burn rate, the price of LUNC is expected to quadruple (4x) by 2025, and nearly 18x in 2030.
However, if the price of LUNC is ever to reach where LUNA was before the Terra ecosystem collapse in May 2022, it would take approximately 72 years.
Disclaimer: The author’s comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)
