Will Luna Recover or Will LUNC Go Up?

Latest Luna Classic Price

After the Terra crash in May 2022, the Terra Foundation launched a new version of Luna called Luna 2.0 $LUNA. The older crypto is now called Luna Classic $LUNC. While it was expected that investors would back the new Terra Luna, the reverse happened. Luna Classic is now 2.5x larger in Market Cap than Luna 2.0. The question is, is this Terra Luna recovery sustainable and real? Read on.

Why did Luna Crash?

• The Terra UST was an algorithmic Stablecoin backed by Terra Luna Token
• $2B worth of UST was unstacked from Anchor and sold in the market. This led to a de-pegging of UST from the dollar
• As a consequence, many consumers began to convert their UST (worth less than a dollar) with a dollar worth of Luna
• This led to billions of dollars worth of Luna being mined.
• The cycle of further UST Selling continued leading to the mining of billions of Luna which in turn crashed the price of Luna as well.

Will Luna Classic Recover? Performance to date since Fork

Luna Classic Performance May-September

• Luna Classic: +239.6%
• OKB*: +35.0%

*Benchmark, Best Blockhain Crypto, last 12 Months

Luna Classic Outperformed every single cryptocurrency between May to September

LUNC Performance October- June

• Luna Classic: -69.3%
• OKB: +193.1%

Luna Classic Underperformed most cryptocurrencies between October and June.

LUNC Performance in 2023

• Luna Classic: -32.2%
• Luna 2.0: -31.9%

New: Is Luna Classic Worth Holding?

LUNC has been sinking since October 2022 despite the overall crypto market making significant progress. However, it surged over the last 24 hours

Will Luna Classic Crashing?

Luna Classic is trending lower even as the rest of the crypto market has performed well in 2023. Why is that the case?

• Investors have a larger number of options this year – With inflation coming down, there is a bullish feel in the Crypto market. New Launches, New Meme Coins, and Coins that were struggling last year are all performing well. Most cryptocurrencies are working hard to improve use cases and this is driving partnerships and expansion of the ecosystem.
• Luna Classic is playing catch up: The L1 team is still focused on upgrading Terra Classic to make it friendly to Dapps
• The constant state of conflict: The Luna Community has been in a constant state of conflict with those trying to make money easily out of passionate investors. While the community has overcome all these odds, it has delayed the development effort.

Will Luna Recover?

What has the Luna Community done so far?

• Upgrading the Blockchain to make it enable to DApps. Significant and continuous technology updates to make the Blockchain more App friendly. With a specific target of enabling Terra Luna 2.0 based apps to operate on Luna Classic
• Burn – The Terra Luna Classic tax burn is seen as a potential recovery plan for the crashed Terra ecosystem as it would reduce the supply of Tokens to the market. 50 Billion Tokens have been burnt so far
• No Minting – No minting of new tokens to ensure Burn is effective
• IBC- IBC activation enables conversation and messaging across blockchains. This encourages DApps to operate in multiple blockchains. The primary target was DApps on Terra Luna (2.0)
• Repegging USTC to $1 to improve liquidity and enabling burn at a faster pace
• Over the last few weeks, small community-driven apps have debuted on the blockchain

All measures were focussed on two main themes- Burn a significant proportion of tokens and two, enable the technology to encourage Dapps to launch their services on Terra Classic which in turn drives demands for Luna Classic Tokens.

Luna Classic was on a path of recovery between May and September. However, after the Burn tax was rolled out, the recovery has not only stalled but the crypto was down for 3 months. It has since recovered somewhat but the big question is if Luna will recover or if it is at a dangerous place now.

Luna Classic’s Price recovery will depend on a few factors:

• Macroeconomic environment
• Development of Luna Classic Eco-system
• Differentiation versus competition

Among the above three factors, the macroeconomic environment is not in control of the Luna Classic Community. So let us focus on the other two

The Luna Classic Ecosystem

• Here is the latest list of Luna Classic Ecosystem. Many of them are not active on the Terra Classic blockchain. While a precise number is unavailable, it is unlikely to be in the double figure. On the other hand, the forked Luna 2.0 has a reasonably extensive list though it is doubtful that many are active there either. One of the agendas of the more technically minded community members was to find a way to ensure Luna 2.0 DApps were also present on Terra Classic. However, limited progress has been made as the top agenda item was moving Infrastructure control into the hands of the community. At the moment, there isn’t enough money to complete that transition.
• After some failed attempts, most community voices have returned to pushing for more burning. Given the results of the last 3 months, it isn’t very likely to yield results.

Differentiation

Without the ecosystem, there is no standout as far as Luna Classic is concerned. There are numerous tokens with better use cases and a focus on developing the ecosystem. There is increased pressure on new tokens to enable numerous use cases.

So at the moment, one can say with confidence that current community activities will NOT spur a recovery in Luna Classic price. Luna Classic could still recover due to market conditions improving but that would be in line with the market and not the outperformance as seen between May and September.

Will Luna Classic Recover? Latest Luna Classic News

• A new proposal to remove the current L1 team from their positions via a “No Confidence” vote is being discussed. The summary
  • Addition of ‘unsanctioned backdoor code’ into the LUNC’s GitHub repo, which enables centralized censoring of transactions
  • The L1 team (and its handlers) are accused of brazenly ignoring governance, disobeying the chain’s protocols, acting behind closed doors, and violating defi ethos, all while working on initiatives and projects not sanctioned by the wider LUNC community.
  • The proposal calls for the current L1 team to step down from their positions and return all money received for Q2 back to the community pool. This includes Frag, Vinh, Steve, anyone else on the L1, trainees, juniors, any “hidden” developers, etc.
• The Seoul Southern District Court has ruled that Terra’s native cryptocurrency, LUNC (formerly LUNA), should not be considered a security and is not regulated by the Capital Markets Act.

Latest Luna Classic Video

Read: Terra Luna Classic Price Prediction 2023, 2025, 2030 and 2040

Will LUNC Go Up? Analysis of recent performance

LUNC Monthly Performance

• January 2023: +13.9%
• February 2023: -3.6%
• March 2023: -23.2%
• April 2023: -14.6%
• May 2023: -19.5%
• May 2023: +19.7%

In the last 6 months, LUNC has gained in 2 months and has traded negatively in the other 4 months. In October and November combined, LUNC lost over 50% of its value.

Will luna classic recover to $1, 1 Cent

Could Luna Go back up again?

3 major factors will determine if Luna Classic goes back up again

• Government regulation
• Macroeconomic Factors
• Token Utility

Potential Use Cases for Terra Luna Classic

Why Luna Classic should focus on DeFi

1. Historical reasons: The original Terra Luna was a huge player in DeFi until May 2022. Numerous DeFi players like Anchor and Risk Harbor lost massive value in the Crash of May 2020.
2. DeFi’s Growth opportunity is huge
   • The need for Decentralized finance (DeFi) will continue to rise not just in the United States but also all over the world as consumers look for ways to borrow money with the lowest hassle or invest in assets with the highest return and lowest risk. DeFi-based products are attempting to solve this problem. For example, traditional secured lending (Like borrowing against deposits or other liquid assets like shares or mutual funds) is under threat from DeFi-based lending. So, a consumer can borrow against their crypto assets for an unlimited period and a small fee as long as the value of their cryptocurrency is higher than the value of the capital borrowed.
   • In the same process, a person can also involve in a form of lending (not P2P) by contributing to the lending pools and earn a healthy return.
   • Unlike traditional finance, the technology and algorithms along with proof of consensus validators run and operate this process as opposed to middlemen (and women) that drive many of these practices and processes in traditional lending companies and banks.

Can Luna Classic operate in the NFT Space?

Miata, an NFT Marketplace launched in November 2022 on Terra Classic. In two months, traffic on the website has been rising (even if it is minuscule).

MetaGloria another NFT game is set to launch on Terra Classic this year.

The Terra Classic blockchain is built using the Cosmos SDK. Binance, Crypto.com, and ATOM are also built using the Cosmos SDK. BNB is ranked 7th while Cronos is ranked 16th on NFT Sales. When compared with Solana, Cosmos is slower and also costlier. So while it is possible to launch NFTs on Terra Classic, there are better options in the market. That said, Cosmos is better than Solana on interoperability and that gives Terra Classic the edge.

So Which Use cases should LUNC focus on?

The more influential folks in the Luna Community have been toying with the idea of accessing the DeFi apps already on the Terra Luna 2.0 platform. Some argue that it is quite straightforward and involves activating Inter-block communication (IBC). IBC enables the creation of cross-chain decentralized applications and the use of different blockchain networks to access different DeFi services. But in practice, this involves other blockchains willing to share access to these services both technically and as a strategy. At the moment this is a work in progress.

NFT will continue to be of interest for Terra Classic but perhaps not its biggest strength.

Would Luna ever recover – New Government regulations?

Government regulation – With the crash of FTX in November and Luna earlier, there is an increased chance of Government regulation. The SEC vs XRP case will determine whether such regulation will come via court precedents or via new laws. New laws are likely to be focused on increased transparency on token ownership (KYC, Share), voting rights, and taxation. This will help well-designed tokens and impact many of the tokens that are adding zero value and /or are mostly owned by the Founders themselves.

Will Luna Classic Recover? Macroeconomic Factors

• Inflation has begun to fall and is below 6%, it is likely that rate hikes will ease a little but unlikely to stop before inflation falls below 4%
• Crude Oil is hovering above $85
• Layoffs in the United States have risen over the last few weeks
• While Inflation has fallen, there isn’t too much good news in the economy.

Will Luna recover? Token Utility

• The community has organized well and has accomplished a lot of milestones between June and September. This included Getting new validators and working hard to get the governance mechanisms in place. The community is central to LUNC’s success. 
• However, the community has not accomplished much after Burn was rolled out. There is a need for capital to develop the ecosystem for developing and sustaining use cases in the blockchain. Many of the technical papers written by developers have not won the support of the community yet.

Can Luna Classic Recover? $LUNC vs $LUNA Trading Volumes

LUNC tends to dominate for fewer days in a month but pumps much harder than $LUNA. For example, LUNC has had 13 days when Volume had risen above $1 B since July. It was just 8 days for $LUNA. This volatility is strongly connected to newsflow and community activities which is absent in the case of $LUNA.

In the meanwhile, LUNA 2.0 is getting stronger by the day. January was the best month for LUNA 2.0 since August 2022. However, LUNC picked up momentum over the last few days.

• LUNC was ahead of LUNA for 31 days in March and 8 days in April out of 21 days
• LUNC was ahead of LUNA for 22 days in February and for 17 days in January.
• In December, LUNC was ahead every day of the whole month
• LUNC was ahead 29 days in November
• In October, LUNC was ahead 28 days

Read: Cardano Price Prediction

Will Luna Recover? What about Trading Volume?

Looking at the $LUNC volume data for the last 31 days, LUNC price is dependent a lot more on Market Sentiments rather than trading volume. This could imply that the risk of LUNC crashing is much higher than before should market sentiments turn bad. The good news is that the price has remained stable over the month.

In Sum, the chances of $LUNC recovering are good as the overall cryptocurrency market has also begun a path of recovery. However, should the community activities stall, it could end the cryptocurrency fairly quickly.

Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.