Binance has completed its fifth token burn for Terra Luna Classic (LUNC), sending over 24,853 tokens to the designated address. This initiative is part of a broader strategy aimed at reducing the circulating supply of Terra Luna Classic financial assets.
Binance intensifies the burn of Terra Luna Classic (LUNC)
In the current month alone, Binance has burned nearly 498.6 million tokens, contributing to the removal of a total of 73.04 billion Terra Luna Classic units from the market. This number represents 17.8% of the total tokens burned by the entire Terra Luna Classic community, leading to a significant supply reduction of 411.17 billion Terra Luna Classic units.
In particular, over the past seven days, the cryptocurrency community has burned more than 383 million tokens, including a peak of 200 million tokens in one day, Wednesday. All of this has led to a decrease in the total circulating supply to around 6.49 trillion tokens, which is a significant number for this currency.
Future prospects: Developments of the InterChain Summit and Terra Classic
The Terra Luna Classic community is preparing to participate in the InterChain Summit of Cosmos, scheduled to be held in Germany on June 20 and 21. During this event, important topics related to Terra and Terra Classic chains will be discussed.
One of the key upcoming points is the reactivation of the market unit project, a proposal put forward by Vegas. This proposal could significantly impact the governance and functionality of the Terra Classic network.
Another important issue is the rising value of the oracle pool, which has seen a sharp decline from 115 billion tokens to 69 billion tokens in just one year. This decline raises concerns in the community and highlights the need for interventions to support and enhance confidence in the Terra Luna Classic ecosystem.
Why does the price of LUNC continue to decline?
Despite intensive burn operations, the price of LUNC saw a slight increase over 24 hours, by 0.5%, settling at $0.00005718. However, trading volume decreased by 27%, indicating a decline in market participants' interest.
This downward trend reinforces the negative picture that emerged in February when what is known as the "death cross" occurred. Technically, this happens when the 50-day moving average (50-SMA) falls below the 200-day moving average (200-SMA), which is a clear signal of a bearish trend.
The key support level is around $0.000055: breaking this level could cause the price to slide between $0.000045 and $0.00005. Additionally, the short-term Exponential Moving Average (20-EMA) has fallen below the 50-EMA, reinforcing bearish signals.
Conflicting signals from the derivatives markets
On the derivatives front, open trading volume for LUNC futures contracts increased by 0.77% over the past 24 hours, highlighting optimism among Binance traders. In the past four hours, this interest rose by another 1.54%, indicating positive expectations.
However, on other major platforms like Bybit, open interest has declined by 1.32%, indicating a more cautious or negative stance from operators.
Overall, the open interest volume for LUNC futures contracts is around $8.21 million, with slight positive differences on platforms like OKX and Bitget.
Despite these partially encouraging signals, the overall market trend remains bearish. The downward pressure on LUNC's stock continues to limit the chances of achieving a significant rise in the short term.
The impact of burning and the outlook for Terra Luna Classic (LUNC)
The continuous burning of Terra Luna Classic tokens represents a key mechanism to combat the excessive decline in supply, which is a historical problem facing this financial asset. The aim of reducing the circulating supply is to improve scarcity and thus increase the potential value of LUNC.
However, positive effects on the price have not yet been significantly observed. Active community participation and a focus on events like the InterChain Summit are two important elements to drive the future of the project.
At this stage, it is crucial to monitor the technical development of the market, especially the key supports and signals coming from the derivatives, to understand any changes in sentiment.
Finally, operators and investors should closely follow governance and development initiatives, such as the reactivation of the market unit, which could represent a turning point for Terra Luna Classic and its ecosystem.
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