Terra Luna Classic Price Analysis

Terra Luna Classic price has bounced back slightly after crashing to a key support level this month. After hitting the key support at $0.00005650 on March 11, the token has risen to $0.000065 as the burn rate has remained high. So, is it safe to buy the LUNC price dip?

Terra Luna Classic Token Burns Have Risen

One potential catalyst for the LUNC price is that the LUNC token burn has continued to grow this month.

Data shows that over 175 million LUNC tokens have been incinerated in the last seven days. These burns have brought the cumulative LUNC burns to over 406 billion tokens since 2022, reducing the number of coins in circulation to about 6.49 trillion.

A token burn is an essential metric in the crypto industry because it helps to promote deflation, unlike a token unlock, which dilutes existing holders by emitting new tokens.

Terra Classic has been burning its tokens since its inception in May 2022. Most of these burns came from Terraform Labs, which was forced to burn billions of coins as part of its bankruptcy process. Other burns have come from individuals and organizations that believe in Terra’s mission, with Binance notably burning over 70 billion LUNC tokens in recent years.

Meanwhile, Terra Luna Classic tokens are also burned from network fees, although these contributions are currently negligible.

Key Ecosystem Challenges

Another reason for the LUNC price crash is limited growth in the Terra Luna Classic ecosystem. Despite having tens of dApps, the total value locked (TVL) has dropped to $801,000, which is minimal compared to nearly $100 billion in the DeFi industry.

The biggest dApps in the Terra Classic ecosystem include Terraswap, Loop Finance, Eris Protocol, and Edge Protocol. Additionally, the network holds only $524,000 in stablecoins, a small amount compared to over $238 billion circulating across the stablecoin market.

There are also signs of a decline in the number of core developers on Terra Classic, with the count falling from 60 at its peak to just 9, leading to a decrease in project commits.

LUNC Price Technical Analysis

The weekly chart shows that the Terra Luna Classic price has been in a strong downtrend over the past few years. It has dropped to a low of $0.000054, a vital price it has not dipped below since 2023.

This price represents the lower side of a descending triangle pattern, indicating a bearish continuation. The price has stayed below the 50-week moving average, suggesting bearish control.

Two scenarios exist for LUNC price:
1. The descending triangle could lead to further downside, potentially to the support level of $0.000050.
2. Alternatively, the consolidation might indicate an accumulation phase, suggesting that the LUNC price could surge as it enters the markup phase of the Wyckoff Theory.

The post Terra Classic (LUNC) price at risk even as the burn rate continues appeared first on Invezz.