After recording a significant rally in defiance of the broader crypto market price movement, Terra Classic (LUNC), the original chain of the now collapsed Terra (LUNA) ecosystem, is experiencing a massive sell-off.
Indeed, the token was trading at $0.00020 by press time on September 26, correcting by about 14% in the last 24 hours. The correction has pushed LUNC to rank as the worst-performing asset among cryptocurrencies tracked by CoinMarketCap over the 24 hours.
Elsewhere, the LUNC weekly chart shows the token has corrected significantly with losses of over 25% falling from a high of $0.00027. The correction follows increased selling pressure with the token recording an outflow of about $540 million in a week from a high of $1.74 billion recorded on September 19.
The correction comes after LUNC’s price surged amid increased buying pressure with the community implementing new governance strategies. Consequently, the rally also triggered an uptick in other assets associated with the Terra ecosystem.
Tax burn implementation triggers LUNC collapse
However, the latest correction emerged after Binance announced that the crypto exchange would not implement the 1.2% tax burn for off-chain transactions involving LUNC. Notably, the tax burn was among the key initiatives the LUNC community took to give the asset utility. The tax burn is meant to make LUNC a deflationary asset.
In rejecting the tax burn, Binance CEO Changpeng Zhao noted that implementing the plan would impact trading on the platform. However, Binance has approved the rollout of the 1.2% tax burn on deposits and withdrawals. Notably, the social trading platform eToro is among the platforms that have resolved to implement the tax burn.
Similarly, LUNC has also corrected this after Binance opted to suspend support for the Shuttle bridge. LUNC users have used the bridge to trade the token using the Ethereum (ETH) blockchain.
It is worth noting that LUNC has taken the trajectory of another asset whose parent companies had run into trouble or collapsed. The assets generally rallied as the respective communities placed a bet they would rebound and mirror the growth trajectory of meme coins like Dogecoin (DOGE).
The rally occurred mainly due to coordinated community campaigns to short-squeeze the assets and inspired short-term rallies.
Catalysts for next LUNC rally
Furthermore, LUNC’s prospects might be outweighed by the broader crypto market volatility, but the community will look for critical triggers.
Potential catalysts for the asset’s rally will likely stem from increased exchange support and news regarding the TerraLabs founder Do Kwon. Notably, Kwon is being sought after by Interpol after a South Korean court issued his arrest warrant over his role in Terra collapse.
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Source: https://finbold.com/terra-classic-loses-momentum-after-plunging-over-25-in-a-week-amid-increased-selling-pressure/