Terra Luna Classic (LUNC) price has faced downward pressure this week, mirroring the performance of Bitcoin and other altcoins.
LUNC dropped to the critical support level of $0.00010, its lowest point since December 20th last year. This represents a 42% decline from its high in December.
One potential factor affecting the LUNC price is the ongoing token burns, which have accelerated in recent months. Data from LUNC Metrics reveals that the network has burned over 397 billion tokens since May 2022.
In the past seven days alone, 341 million tokens have been burned, with this number continuing to rise. On January 10th, the daily burn surpassed 686 million. Binance remains the largest burner of LUNC, having incinerated nearly 70 billion tokens. Meanwhile, DFLUNC Protocol and LunaticsToken have burned over 2 billion and 1.9 billion LUNC, respectively.
These token burns have helped decrease LUNC’s circulating supply over the past two years to 6.50 trillion. In theory, token burns increase the price of a cryptocurrency by reducing supply and enhancing the value of the remaining tokens.
In addition, more data indicates that investors have increased their staked tokens in recent days. The staking ratio has risen to 15%, equivalent to 981 billion LUNC tokens, up from last week’s low of 14.8%.
A higher staking ratio is a positive indicator for a cryptocurrency as it reduces the number of tokens available for sale on the market, thereby alleviating selling pressure. These positive metrics may support a recovery in LUNC’s price once the ongoing sell-off concludes.
Price analysis of LUNC
The daily chart reveals that LUNC price reached a peak of $0.0001790 in December before retracing some of those gains to its current level of $0.00010. This decline has occurred amidst overall weakness in the broader crypto market.
Most recently, the token broke below the key support level of $0.0001054, which served as the neckline of a small double-top chart pattern. Additionally, LUNC has fallen below both the 50-day and 200-day moving averages.
On a positive note, the coin has formed a cup and handle pattern, a popular bullish continuation indicator. The ongoing pullback is likely part of the handle formation. Therefore, there is a possibility that Terra Luna Classic’s price will rebound as long as it remains above the critical support level of $0.00009060.
If this recovery materializes, the initial target to monitor will be the double-top level of $0.000122, followed by the upper side of the cup at $0.0001310, and last December’s high of $0.000179. Achieving last month’s high would represent a 73% increase from the current price.