The Terra Luna Classic (LUNC) token is showing signs of bottoming out after experiencing a 90% decline from its all-time high. Despite its struggles, recent developments, including a major burn milestone and increasing staking activity, suggest that LUNC may be on the verge of a bullish reversal.
LUNC Reaches 406 Billion Token Burn Milestone
A key catalyst for LUNC’s potential recovery is its growing burn rate. The network has now incinerated over 406 billion tokens, with 280 million tokens burned in the past week alone.
- 336.2 billion tokens have been moved to the burn wallet.
- 70 billion tokens have been burned on-chain.
- Binance, the leading exchange in LUNC burns, has eliminated over 71 billion tokens over the past three years while continuing to support protocol upgrades.
LUNC Staking Activity Increases
Another encouraging sign is increased staking participation. The LUNC staking ratio has risen to 15.85%, marking its highest level since November 10, 2024. A high staking ratio—especially during a price decline—often signals strong long-term investor confidence, which could contribute to a future price recovery.
Technical Analysis: LUNC Showing Bottoming Signals
The weekly price chart indicates that LUNC has found strong support at $0.00005385, a level it has failed to break below since 2023. Historically, this support level has held firm:
- July and September 2023: Price bounced back after testing support.
- 2024: LUNC failed to break below this level, forming a quadruple bottom, a well-known bullish reversal pattern.
- June 2022: The last major drop below support turned out to be a false breakdown, which led to a significant recovery.
If LUNC successfully breaks out from this pattern, the next major resistance target is $0.0001797, which is 180% above its current level. However, a drop below support could result in further downside, potentially bringing the price down to $0.000034.
LUNC’s History: From Terra Collapse to Revival
LUNC, originally known as LUNA, was created by Do Kwon and Daniel Shin under Terraform Labs. It was designed to support the Terra ecosystem’s algorithmic stablecoin (UST). However, in May 2022, UST de-pegged from the U.S. dollar, leading to the catastrophic collapse of Terra and a massive loss in LUNC’s value.
Following the collapse, a hard fork introduced Terra 2.0, creating a new token while LUNC remained as the legacy token. Despite its turbulent history, LUNC continues to see strong community support, ongoing token burns, and increased staking activity, all of which could contribute to a potential rebound.
While LUNC remains far from its peak, key developments—including a record burn milestone, increased staking, and strong technical support levels—point to a possible bullish breakout. If current trends hold, LUNC could stage a significant rally, with the next major resistance level 180% above its current price. However, investors should remain cautious, as a break below support could trigger further downside.
