While many altcoins experienced a price increase after Bitcoin’s surge over $40K, Terra Luna Classic (LUNC) stood out with an exceptional performance. LUNC’s price surged almost 150% in just a week, separating itself from other altcoins. However, at these new high levels, LUNC is facing slight resistance as investors begin to sell off their holdings. This sell-off has led to a spike in volatility for LUNC, suggesting a big move ahead.
LUNC’s Open Interest Touches 1-Year High
Following the sudden rise of LUNC’s price from $0.000132 to a peak of $0.00028, a significant liquidation event occurred among its holders. According to data from Coinglass, LUNC experienced a substantial short squeeze, with over $4.7 million liquidated as the price moved against bearish predictions. Concurrently, bullish traders also faced setbacks, with more than $2.5 million in positions being liquidated as LUNC’s upward momentum discontinued.
The recent downturn in Terra Luna Classic’s performance happened due to community-driven factors, particularly the approval of a proposal to significantly reduce the number of validators on the Terra Classic chain. This decision faced criticism from certain validators and members of the community, who raised concerns about potential risks related to security, centralization, and growth. Despite these objections, the proposal managed to surpass the required threshold for approval, with support from some of the top 100 validators.
Nevertheless, traders remain bullish on LUNC, as seen by the continual increase in its open interest (OI) metric. Currently, LUNC’s open interest is around $30 million, reaching an annual high that was last observed prior to FTX’s crash.
In the short term, a slight correction in LUNC’s price is anticipated, but expectations are for a rebound. The long/short ratio currently stands at 0.88, with more than 53% of positions being short, indicating that a majority are anticipating a drop in value.
What’s Next For LUNC Price?
LUNC price continued to surge, recording 145% gain this week. Yet this upward movement didn’t gain further momentum as the price declined from the peak of $0.00028, hinting at a reduced interest in higher price levels. As of writing, LUNC price trades at $0.000223, declining over 6% from yesterday’s rate.
Currently, bulls are strongly defending a decline below $0.0002 as a drop below that level will strengthen sellers’ positions. However, bears continue to intensify pressure by sending the price below EMA20 on the 4-hour price chart. The 20-day EMA is leveling off at $0.00021, and the Relative Strength Index (RSI) has dropped from the overbought region as it trades at 60. This could mean the trading range might hover around the bearish zone of moving averages.
Should the buyers manage to push the price over $0.00028, a surge towards $0.00037 is possible. Conversely, a drop below EMA20 might lead to a decline down to $0.00014.
