Terra Luna Classic price remained under pressure this week, in line with the performance of Bitcoin and other altcoins.
Terra Luna Classic (LUNC) dropped to the key support level of $0.00010, its lowest point since Dec. 20 last year. It has slipped by 42% from its December high.
One potential catalyst for the LUNC price is the ongoing token burns, which have accelerated over the past few months. Data from LUNC Metrics shows 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 the number continuing to grow. On January 10, the daily burn jumped to over 686 million. Binance remains the largest LUNC burner, having incinerated almost 70 billion tokens. Meanwhile, DFLUNC Protocol and LunaticsToken have burned over 2 billion and 1.9 billion LUNC, respectively.
These token burns have helped reduce LUNC’s circulating supply over the past two years to 6.50 trillion. In theory, token burns boost a cryptocurrency’s price by reducing supply and increasing the value of the remaining tokens.
Meanwhile, more data shows that investors have increased their staked tokens over the past few days. The staking ratio has risen to 15%, or 981 billion LUNC tokens, up from last week’s low of 14.8%.
A higher staking ratio is a positive sign for a cryptocurrency, as it reduces the number of tokens available for sale on the market, thereby easing selling pressure. These positive metrics may help support a recovery in LUNC’s price once the ongoing sell-off ends.
LUNC price analysis
The daily chart shows that LUNC price peaked at $0.0001790 in December before erasing some of those gains to reach the current $0.00010 level. This retreat has occurred amid ongoing weakness in the broader crypto market.
Most recently, the token broke below the key support at $0.0001054, which was the neckline of a small double-top chart pattern. Additionally, LUNC has moved 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, it’s possible that Terra Luna Classic’s price will rebound as long as it holds above the key support level at $0.00009060.
If this recovery materializes, the initial target to watch will be the double-top level at $0.000122, followed by the upper side of the cup at $0.0001310 and last December’s high of $0.000179. A return to last month’s high would represent a 73% jump from the current price.
