In the past few hours, the entire Terra ecosystem experienced a significant upward trend, fueled by a series of favorable developments and community proposals. This marked the first robust surge in seven months, leading to a considerable increase in open interest. During this period, LUNC’s price soared by over 70%, LUNA’s value increased by nearly 25%, and USTC witnessed a 500% gain. However, these gains have since undergone considerable corrections, and the Terra ecosystem is once again facing bearish pressures.
LUNC’s Open Interest Touches 6-Month High
The recent rise in Terra Classic tokens over the past 2 days was driven by its community due to attempts at rejuvenation, ranging from implementing token burning mechanisms to establishing inter-blockchain communication (IBC). Additionally, the Terra Luna Classic community quickly passed Proposal 11885, which introduces terrad client v2.3.1, aimed at fixing a critical account sequence issue and introducing a dynamic validator commission module.
This development has led to a surge in LUNC and USTC prices following its liquidity deployment. Additionally, strategic investments and the introduction of perpetual contracts by Binance, LUNC further fueled its rally. According to data from Coinglass, traders switched to this altcoin amid increasing market volatility. This pushed the OI to a 6-month high of $17.84 million.
Luna Classic Labs’ purchase of 25.6 million USTC for $500,000, as part of their treasury policy, doubled USTC price and positively impacted Terra Classic (LUNC) trading volumes. This move was further triggered with Binance Futures launching a USTC Perpetual Contract with up to 50x leverage.
Interestingly, during the recent rally, both buyers and sellers decided to liquidate their positions after holding for several months. Significantly, buyers liquidated positions worth $1.1 million, while sellers offloaded $1 million in short positions. This activity led to the long/short ratio falling below 1, indicating a change in traders’ mood.
What’s Next For LUNC Price?
Buyers initially pushed LUNC price past the monthly resistance level of $0.000129, but maintaining these highs was proving challenging, as indicated by the long wick on the day’s candlestick. As of writing, LUNC price trades at $0.0001025, surging over 8.7% from yesterday’s rate.
Though sellers are attempting to pull the price down to $0.00009, buyers hold strong. A rebound from this level would suggest a shift to positive sentiment, potentially leading bulls to again challenge the $0.00013 resistance. Overcoming this could send the skyrocketing above $0.000143.
Conversely, a drop below the 200-day EMA on the 4-hour chart could signify a bearish consolidation within the $0.000068 to $0.000052 range.
Currently, there’s a strong battle between the bulls and bears as the price faces intense volatility near the resistance line. This suggests a growing impatience, which might soon result in a solid move in the price chart.
