In the last 24 hours, Terra Luna Classic [LUNC] It was up more than 90%, at press time, marking the second straight day of gains. The rally also pushed LUNC to second place among tokens on CoinMarketCap.
This price rise was driven by renewed interest in founder Do Kwon’s upcoming case resolution, scheduled for December 11.
Although Do Kwon has already pleaded guilty to fraud related to far A crash, a development that usually negatively affects sentiment, moves the market in the opposite direction.
Despite the unfavorable news, LUNC’s price rose sharply, making investors question the motives behind this unexpected rise.
Liquidating short positions accelerates the rally
Aside from the increase in interactions due to Do Kwon’s discussions, the spike in shorts liquidations played another major role.
At the time of writing, the LUNC pair had the largest short liquidation, ahead of Ethereum [ETH] And Bitcoin [BTC].
According to CoinGlass data, the total amount of liquidity cleared from LUNC pairs exceeded $1.47 million per hour and $5.19 million in 12 hours.
This represents approximately 10% of all short position liquidations.
Source: Coinglass
An alternative token, LUNA, created by Do Kwon after abandoning LUNC, was also on the charts, although it did not enjoy the same amount of trading activity.
However, it has extracted some liquidity from LUNC, suggesting that the move could be more aggressive.
High LUNC code burns
In addition, on-chain activity, especially supply drop, was implemented perfectly. The number of tokens burned weekly has risen to over 427 billion LUNC.
For today, 84.164 million LUNC have already been burned. The previous day’s supply cut was around 691.625 million LUNC.
December 1st and 5th saw the biggest burning days this month, with more than 600 million tokens destroyed.
Source: LUNC Burn Tracker
Terre Form Labs burned the largest portion of all burns, about 58%. On-chain activity and short liquidation affected the price reaction.
Will the technical outlook remain bullish or will the decision on the Do Kwon case change it?
Will LUNC price maintain its momentum?
On the charts, LUNC broke above the downtrend channel on the 4-hour chart. The consolidation lasted more than a month before the breakout on the second day of December.
The strength of the bulls was evident in the MACD bars, which were huge and green, at press time. Cumulative Volume Delta (CVD) crossed $41 million in favor of buyers and continued to rise.
Looking at the move over the past two days, LUNC price rose more than 157% from $0.00002739 to $0.00007088. However, sellers are starting to reject the July highs at $0.00007088.
Source: Trading View
For the rally to continue, the bulls must maintain their dominance over the bears in LUNC. Its strength was evident in the recovery from the decline that has continued since late February.
However, the price has just broken above the bearish structure. This may limit further upside, as the market may still respect the bearish zone.
Final thoughts
- LUNC is up 90% daily on discussions around its founder’s case resolution, increased burn rate, and short liquidation.
- LUNC price can only hold its course if the bulls can control the bears in the future.
