Over the past week, the Terra Luna ecosystem has taken the altcoin market by storm, with both LUNA and LUNC experiencing notable increases. Traders are becoming more bullish as these altcoins break through various resistance levels in quick succession, signaling a comeback in buying interest. But with Terra Luna Classic and LUNA hitting new highs, some short-term traders are looking for an opportunity to cash in and protect their profits.
LUNC’s proposal accelerates the pump
The Terra Luna Classic community will vote on a soft fork to establish a minimum validator committee and implement technical improvements. This follows a proposal to increase the minimum deposit to 5 million LUNC to combat spam. The need for the soft fork arose after the validator commission was accidentally set to 0% during an upgrade.
Till Ziegler argued for a soft fork over a simple governance proposal. Then, blockchain engineer Vinh proposed the soft fork v2.2.2, which included the 5% commission and other upgrades. Voting ends on October 3, 2023, with a current unanimous “Yes” vote share of 1.64%. Previously, the LUNC community decided to cease all Terra Classic USD (USTC) coin operations. As a result of these developments, the prices of LUNA and LUNC are now rising rapidly, as they have successfully generated buying interest in the market.
On-chain data shows a spike in short liquidation for LUNC, surpassing $20,000 today. Additionally, LUNC’s Open Interest increased by $1 million, indicating growing trading activity. But now that the long-short ratio has fallen to 0.67, a bearish correction seems likely.
Conversely, LUNA has experienced a bearish liquidation of almost $300,000. Open Interest has increased by $16 million in just two days, indicating increasing price swings near resistance points. However, LUNA is also seeing a small bearish correction as buyers continue to book profits.
What’s next for the LUNC Prize?
Over the past seven days, Terra Luna’s price rose 37% and LUNC rose 15.6%, indicating explosive momentum in the Terra ecosystem. Analyzing the 4-hour price chart, LUNC price broke above the crucial resistance at $0.000065 as buyers took advantage of the closing of the triangle pattern at $0.000061. At the time of writing, LUNC price is trading at $0.0000658, up over 9.5% from yesterday’s price.
Currently, the bears are aiming to reverse the trend after resistance at $0.000067. Initial downside support is at $0.000064. A recovery from this level would imply a continuation of range-bound trading, just as LUNC previously started with a breakout of $0.00006. This could lead the bulls to target the price of $0.000072.
On the bearish side, should the price fall below the 20-day EMA, it would be a sign of waning bullish momentum. The LUNC price could first approach the benchmark at $0.000058, followed by a possible decline towards the support at $0.000055. With the RSI level falling out of overbought territory, short-term traders are likely to exit, creating more downward pressure.