TerraUSD Reclassification Vote

The TerraUSD token remained in a tight range as the Terra Luna Community members voted to reclassify it and change its name.

Current Price Status

TerraUSD (USTC) price was trading at $0.01266 on Tuesday, down by 45% from its highest level this year. This retreat has brought its market cap to $70 million.

Community Proposal

The Terra Luna Classic (LUNC) community is voting on a proposal that seeks to reclassify USTC from a stablecoin into a Universal Standard Token or a meme coin. This proposal reflects the reality that USTC no longer functions as a stablecoin. The chances of it regaining its $1 peg are slim, as it would need to rise by over 7,300% to reach parity with the U.S. dollar.

Voting Goals

The goal of this vote is to preserve exchange listings and bypass regulatory restrictions. Binance, the biggest supporter of LUNC, has already announced plans to delist USTC later this month, which may prompt other exchanges to follow suit. Reclassifying USTC could help it avoid stablecoin-related regulations, simplifying compliance.

Name Change Proposal

The proposal also seeks to change USTC’s name from TerraUSD to Universal Standard Token Classic, while retaining the ticker symbol USTC.

Historical Context

TerraUSD emerged from the collapse of Terra in 2022, resulting in a $40 billion loss. The original TerraUST or UST was an algorithmic stablecoin designed to preserve the $1 peg through supply and demand managed by arbitrage, relying on a mint-and-burn relationship with Luna.

USTC Price Technical Analysis

Current Performance

USTC’s price crashed to $0.0085 earlier this year, then rose slightly to the current $0.0125, just below the key resistance at $0.01387. This level was significant as it marked the lowest swing in April, July, and August last year.

Market Patterns

USTC price has formed a small double-bottom pattern at $0.010 with a neckline at $0.02193, its highest level this month. A double-bottom is among the most bullish reversal signs in the market.

Future Outlook

Thus, USTC could bounce back and retest the key resistance at $0.03140, about 145% above the current price. However, any drop below the support at $0.0085 would invalidate this bullish outlook.