LUNC: Why could the price of Luna Classic drop further?
On September 26, Binance announced a massive burn off the LUNC token. While the news quickly boosted the token’s price, releasing the bad numbers from the first burn negatively impacted the LUNC price. For some observers, this might not be over yet.
Is the effect of the Binance announcement soon buried?
A few weeks ago, the announcement by the Binance platform of a massive burn of LUNC set the token’s price on fire. In a few minutes, the LUNC price climbed by more than 30%. Over the course of the day, the increase would even exceed 60%.
However, the enthusiasm of the markets will be quickly dampened. Indeed, if the platform allows burning the transaction fees in LUNA Classic, this operation remains in almost all cases, unfavorable to the user who will then prefer to pay the transaction fees of the platform.
The massive burn announced will therefore not take place and the amounts withdrawn will remain quite low compared to the LUNA Classic offers on the market. During the first week of the burn, only 5.6 billion LUNA Classic tokens were withdrawn from circulation. For a total supply of 6.1 trillion tokens. Because of this, the LUNA Classic price deviated by almost 25% between October 2 and 6.
Binance to announce the second week of burn numbers!
Later this evening, Binance is expected to announce the numbers for the number of LUNC tokens that will have been burned between October 2 and 8. Some predict a further drop in the token price if the number is still considered insufficient by the markets. As the table below explains:
The lack of volatility on the asset could also justify traders waiting for one thing: the Binance release. The next few hours could therefore prove decisive for Luna Classic. According to some technical analysis tools, LUNC may be forming a potential top, which could trigger a decline in the asset’s price. On this point, some predictions are for a drop below $0.25.
At the time of writing, the price of the LUNC token remains stuck below the resistance zone between $0.000343 and $0.000329. Volume-profile data shows that the token is currently above the POC checkpoint at $0.000292, the highest trading volume since August 24. A move below this price level could have dramatic consequences for the asset and drive it close to $0.0002. That is a loss of more than 50% compared to the current price of LUNA Classic.
LUNC also remains dependent on the market!
Like all crypto projects, the LUNC token remains largely dependent on the movements of larger projects like Bitcoin or Ethereum. Projects that are themselves correlated to different macroeconomic variables.
This week should be more volatile than usual. With, among other things, the release of the US inflation figures is expected next Thursday. While the consensus is for the third month of slowdown (year-on-year), only the publication of the final figures will be authentic.
On this point, the rule is very simple. If inflation exceeds the consensus, digital assets will fall, as will all risk markets. Conversely, lower-than-expected inflation is likely to be rewarded by the markets.
Follow us on Twitter to stay up to date with the latest live crypto news.