On August 10, Terra Luna Classic (LUNC) experienced a 23.3% price increase when volume accelerated, hitting mid-level prices. Little evidence of strong buying momentum from the OBV and DMI painted a confused picture of the trend. This was accompanied by a nice jump to above 60 on the RSI, suggesting that some volatility and bearish sentiment came back into this market.
The boom in its price came just ten days after the Cosmos chain vulnerability that was exploited to make an unauthorized withdrawal of about $4M came to light, affecting Terra’s prices. Terra chain started producing new blocks on August 8 and finished with the upgrade of the blockchain. A sudden pump in its price shines a better light on the crypto market goal of acquiring the tokens at a $0.000076 low (from August 8 till August 10) as prices surge to $0.000087. However, since August 12, hoarding has calmed down, and now the token price has gone down by 6.86%.
Possible Trend Reversal Has Started
The chart above depicts that the LUNC token has been highly volatile for the last 72 hours— with more short sellers than long buyers. It indicates that the token has been slumping downward, with several sudden dips resulting in the liquidation of large numbers of holders and the acquisition of some to sell at a loss. The general market sentiment is bearish, and these whale dumps could mean the token has very little to no bullish pressure or is just getting played with.
Future Outlook
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With hyperinflation resulting in Luna Classic (LUNC) shedding 99.99% of its value, its fourteen-day relative strength index (RSI) reading of 60.69 is a tell-tale sign that the token is overbought. While it is still in the threshold, a high RSI of 70 (meaning oversold) is not impossible.
The token is currently oversold, indicating a short market frenzy where the chances of losses are much higher than profits, as per technical analysis. Further, in light of the massive liquidations on long positions, this suggests a continuation of downside pressure. Should this trend continue, further falls might trigger more liquidations and enforce a bearish mood. Nevertheless, occasional short liquidations could signal brief recoveries; however, these are unlikely to be strong enough to induce a reversal of momentum in any capacity.
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Luna Classic will likely follow the market over the next six months and whether something is done to work on high inflation. If those changes are not made, it might find its valuation comes to a standstill or even go in reverse. While there may be speculative rallies, the broader direction looks fragile. Caution should be taken as the token may continue to remain volatile, subject to external factors such as market manipulation.
