Plato Data Intelligence.
Vertical Search & Ai.

Three factors account for the 250% increase in the market price for Terra Classic in September

Date:

The LUNC rise, which has seen it outperform top cryptocurrencies so far in September, has been fueled partly by the excitement surrounding Terra Classic’s (1) staking service and new token-burning feature. The token increased by almost 250% month to date, reaching $0.000594 on September 8—its highest level—while Bitcoin (BTC) (2) fell by 4% and Ether (ETH) (3) only rose by 3.5% during the same period.

Profits arose in the Terra Classic market despite the Terra (LUNA) (4) token’s connection to a $40 billion project that failed in May. Since its launch, experts and investors have been skeptical because it is seen as a renamed version of the same Terra project.

However, a flurry of fundamental catalysts recently encouraged them to buy LUNC (5) caused many traders to disregard the warnings. The market for Terra Classic expanded for the following three reasons:

A new Staking Service

The launch of a new staking service (6) on the Terra Classic chain on August 27 was the primary catalyst for the current price increase in LUNC. Compared to Terra Classic’s net supply of 6.9 trillion units, which is about 9% of the total LUNC supply, LuncStaking Bot reports numerous people have staked more than 610 billion LUNC.

A 37.8% annualized yield, among the highest payouts in the cryptocurrency sector, is what StakingRewards statistics show Terra Classic delivers to its customers. The increase in LUNC demand has caused the token’s price to increase by more than 450% since the launch of the staking service, which is said to have been significantly influenced by higher returns.

Token Burn

The Terra Classic developers added a token-burning (7) feature in addition to staking to increase the scarcity of LUNC. At the beginning of September, a member of the Terra Classic community named Edward Kim advocated imposing a 1.2% transaction tax on all LUNC on-chain transactions because any proceeds from this tax would go to a dead address, permanently removing some of LUNC’s supply from circulation.

According to LUNC Burner, a LUNC burning mechanism has already taken approximately 3.6 billion tokens out of circulation permanently.

Future crash risks

Technical indicators, such as the daily relative strength index RSI (8), which reached 90 on September 9—an extremely overbought level followed by a market correction—a showcase that LUNC’s price surge may be at risk of correcting in the short term. Additionally, recent LUNC advances have been accompanied by decreased volumes, which may indicate that traders are skeptical about the durability of the price rally.

spot_img

Latest Intelligence

spot_img