In recent weeks, Terra Classic (LUNC) has been on a rebound and is basking in the green zone with a remarkable seven-day price increase of 13%. The altcoin has witnessed a remarkable increase of 323.66% in the last 24 hours, pushing its value to $0.00006508. This represents an 8% gain amid a generally passive cryptocurrency market. Nevertheless, the altcoin is facing continued selling pressure, as evidenced by the Relative Strength Index (RSI), which has remained below 40 since mid-July.
Despite fluctuations, experts and analysts are bearish on LUNC. Why this negative outlook? Let’s investigate.
$120 is a distant dream
Bitcoin’s recent decline, which fell from $27,500, has put selling pressure on the Terra Classic coin. This in turn has created an opportunity for Rex “Rexyz” Harrison, who has raised significant concerns about LUNC’s potential. Harrison doubts the likelihood that LUNC will reach its ambitious target of $120, an all-time high for the token. He believes that reaching a price of $1 would require substantial community effort, with the likelihood of LUNC reaching $120 appearing extremely low.
Supporting Harrison’s claims, on-chain data shows that the number of short liquidations for LUNC has risen sharply, topping $20,000. Additionally, LUNC’s Open Interest increased by $1 million, indicating increased trading activity. However, with the long-short ratio down to 0.67, a bearish correction seems likely.
Read more: Why are Terra (LUNA) and Terra Classic (LUNC) prices rising today?
Conditions for the $1 price point
Harrison outlines specific conditions for the community to achieve the coveted $1 prize for LUNC. He states that 99.9% of LUNC’s circulating supply, which currently stands at 5.8 trillion, should be eliminated through incineration or strike. This creates uncertainty about LUNC’s journey to $1, given Terra Classic’s current market cap of $374.12 million.
Harrison acknowledges that achieving a 90% mintage reduction could be achievable through a combination of staking and burning, but would still leave 690 billion LUNC tokens in circulation. The analyst believes that strong community support is essential to break through these resistance levels.
Does LUNC need a swap system?
Furthermore, Harrison suggests that such an effort could potentially earn LUNC a price of $0.01, representing a staggering 15,269.87% growth from its current price. However, he notes that despite continued efforts, burning USTC tokens has made minimal progress in reducing the supply glut. Moreover, the burning of LUNC itself has not had a significant impact on the price.
Not all hope is lost…
As a possible solution to LUNC’s reduction challenges, Harrison proposes the creation of a swap mechanism such as LUNC – USTC2. This mechanism could potentially address the supply reduction and price improvement issues faced by Terra Classic.
Also read: SEC lawsuit against Terraform Labs: Do Kwon’s lawyer fights extradition request
