Terra Classic (LUNC), a cryptocurrency born out of the collapse of Terra (Luna) and TerraUSD earlier this year, has been on a meteoric rise in recent days.
The LUNC market is soaring thanks to the resistance of variant levels against the trade value of the US dollar. Over the past 30 days, the cryptocurrency has ranged from a low of $0.00007154 to a high of $0.0002437.
Analysts believe the terra luna classic rally is part of a short squeeze
While bitcoin is currently experiencing a significant decline, Terra Luna seems to be taking the opposite path. Since August 23, Cryto LUNC has risen more than 60%.
The story goes back to May 6, 2022, when the Terra Luna crashed, causing massive losses in almost the entire crypto ecosystem. It is widely believed that this happened as a result of bitcoin’s sharp drop on May 6, 2022.
On May 7, 2022, several massive sell-offs began to short the Terra Luna crypto simultaneously. Coupled with the general negative sentiment in the cryptocurrency market, this led to the fall of the Stablecoin Terra UST, which lost its dollar ratio significantly.
Even with over $1 billion and $500 million, the foundation was unable to stop the fall. Due to the sudden increase in the maximum supply of tokens. Luna cryptocurrency was reduced to fractions of a cent.
Do Kwon, the founder of the company, proposed a new version called Terra. However, the community continued to support the original chain which was renamed Terra Luna Classic (LUNC).
A few months ago, there was a recommendation to start a LUNC burn, which was currently requested by the neighborhood before the currency dropped. The concept behind this is to decrease the amount in circulation of Terra Luna Classic to increase the value of a coin again.
After a period of stability between 0.00008 and 0.00009 US dollars, the price of Terra Luna Classic (LUNC) has crossed the upper zone, establishing a 60% increase since August 23. It is currently trading around 0.000127 Usd.
Analysts believe the rally is part of a short squeeze as buyers try to squeeze short sellers. Short squeezes have become popular in the market lately.
In the long run, it is relatively difficult to defend both LUNA and LUNC. First, the value of LUNA occurred in the past because of the strong market activity in its ecosystem, which was also helped by Terra USD.