USTC and Terra Classic (LUNC) Prices Plummet, What’s Next?

• Luna Classic Labs denied the rumor that it had bought USTC worth $500,000
• LUNC fell by 23.51% while USTC’s price plunged from the $0.071 weekly high.
• LUNC may drop to $0.000068, and USTC might no longer reclaim the $1 peg.

After initially making double-digit increases on November 27, the prices of Terra Classic (LUNC) and Terra Classic USD (USTC) have tumbled. At press time, USTC, which is the algorithmic version of the now-collapsed TerraUSD (UST) stablecoin, plunged by 42.97% in the last 24 hours.

LUNC, like its sister cryptocurrency, fell by 23.51%, according to press time information from CoinMarketCap. Previously, Coin Edtion had reported how LUNC surged to a 90-day high as the Terra team moved toward stabilizing LUNC’s and USTC’s liquidity.

It’s a Pump and Dump

As a result, USTC produced an incredible 192.17% seven-day hike in price. However, there were other developments related to the price increase of both cryptocurrencies. First, Binance announced that it had added a USTC perpetual contract for leverage traders.

But before the Binance development, there was speculation that Luna Classic Labs, the development team behind both tokens, bought a lot of $500,000 worth of USTC at an average price of $0.021. This news was substantial enough to fuel a USTC hike to $0.071 on November 27.

However, Luna Classic Labs later denied the rumor in a post on X (formerly Twitter) on the same day. According to the post, the team said the rumors were lies, and those spreading it had no links with the project.

Moments after Luna Classic Labs’ disclosure, the bullish bis around USTC and LUNC tanked. Subsequently, USTC may not be able to find its way back to the $1 peg, as some predictions mentioned earlier.

Rally’s Over for LUNC and USTC

For LUNC, the 4-hour chart against the USD showed that the token was being sold at a fast rate. This suggests that the perpetrators of the rumors only wanted to pump the token for gains and sell off later.

If market players carry on with the selling, then LUNC has the potential to decrease to $0.000068. The Relative Strength Index (RSI) also showed that buying momentum had become weak. This was also confirmed by the Moving Average Convergence Divergence (MACD).

As of this writing, the MACD had fallen into negative territory. Also, the longer timeframe EMA had crossed over the short EMA, suggesting bearish momentum. 

Should the MACD and RSI readings continue to fall, the price of LUNC, as well as USTC, may keep on dropping. For now, market players may need to ignore trading LUNC on the spot or futures market as the token’s high volatility could incur losses for traders.