Terra Luna Classic (LUNC) has recently captivated the cryptocurrency market with an astonishing price surge, marking a significant rally that defies conventional market logic. This unexpected momentum has pushed LUNC to the forefront of trending tokens, prompting investors and analysts to dissect the complex interplay of factors fueling its resurgence.
Unpacking the Rally's Core Drivers
In a remarkable turn of events, LUNC witnessed a surge of over 90% in just 24 hours, extending its gains for a second consecutive day and cementing an overall rise exceeding 157% in two days. A primary, yet paradoxical, catalyst for this rally is the renewed focus on founder Do Kwon’s upcoming case decision, despite his guilty plea for fraud related to LUNC’s initial collapse. Counter-intuitively, this news ignited positive market sentiment. Concurrently, a massive wave of short liquidations played a critical role, with LUNC pairs experiencing over $1.47 million in liquidations within an hour and $5.19 million over 12 hours, representing a substantial portion of all short positions wiped out across the market.
Supply Reduction and Technical Outlook
Beyond market speculation and liquidations, a significant increase in on-chain activity, particularly token burns, contributed to LUNC's ascent. The weekly burn rate surged to over 427 billion LUNC, with daily burns consistently high, and Terra Form Labs alone accounting for 58% of these supply reductions. Technically, LUNC has broken decisively above a descending trend channel on its 4-hour chart after more than a month of consolidation, signaling strong bullish momentum supported by robust MACD bars and a Cumulative Volume Delta exceeding $41 million in favor of buyers. However, the rally faces potential resistance as sellers begin to emerge around July's previous highs, suggesting that the sustainability of LUNC's upward trajectory hinges on bulls maintaining their dominance against persistent bearish pressure.
