Terra Luna is down by 4 per cent in today’s trading session. The crypto has also traded sideways for the past five days, with prices alternating between bullish and bearish intraday trading with each trading session.
What is Luna Classic
The Luna classic was launched on May 28, after the previous Luna project failed and dropped by 99 per cent. Before the May crash, Luna Classic served as the Terra platform’s reserve currency, with three core functions that included being used for staking when mining, providing stability of Terra stablecoins, and as an incentive for the platform’s blockchain validators.
Unfortunately, the second functionality of ensuring the stability of Terra stablecoins is also what led to its fall. Luna was algorithmically linked to UST. This meant that any time a UST stablecoin was de-pegged, the stablecoins would be sold for Luna, increasing Luna’s supply and reducing UST supply. Unfortunately, in May, UST de-pegged abnormally, resulting in more Luna crypto minted. The result is a continuing cycle of excessive supply for both coins that resulted in the fall of Luna.
The original Luna would then be renamed Luna classic during the May 28 launch of the Luna project hard fork. The idea was to revive the project and help users who had lost money on the original Luna recover some of their investments.
Luna Classic Price Prediction
Today’s 4 per cent drop is a continuation of a recent sideways market, where each trading session has wiped out gains or losses made the previous day. The sideways market has lasted for almost a week, and it is highly likely to continue for the next few trading sessions.
Therefore, I expect today’s market losses to be wiped out in the next few trading sessions. I expect the prices to continue trading within the $0.00010 and $0.00016 support and resistance levels, respectively. My sideways analysis will only be invalidated if prices trade outside the support and resistance levels mentioned above.