Terra Luna Classic (LUNC) Has Been Rejected Due to $30 Million in Open Interest: Here’s What’s Next for LUNC Price

While many altcoins experienced price increases after Bitcoin surged above $40,000, Terra Luna Classic (LUNC) stood out with its outstanding performance. LUNC’s price soared nearly 150% in just one week, setting it apart from other altcoins. However, at these new high levels, LUNC is facing some resistance as investors begin to sell their holdings. This sell-off has caused LUNC’s volatility to spike, suggesting a big move ahead.

LUNC’s open interest hits one-year high

After the price of LUNC suddenly rose from $0.000132 to a high of $0.00028, a significant liquidation event occurred among holders. According to data from Coinglass, LUNC experienced significant short-term pressure, with more than $4.7 million liquidated as the price moved against bearish forecasts. At the same time, bullish traders also faced setbacks. More than $2.5 million worth of positions were liquidated as LUNC’s upward momentum came to a halt.

The recent performance decline in Terra Luna Classic has been caused by community-driven factors, most notably the approval of a proposal to significantly reduce the number of validators on the Terra Classic chain. This decision was met with criticism from certain validators and community members who raised concerns about potential risks related to security, centralization, and growth. Despite this opposition, the proposal received support from some of the top 100 validators and succeeded in exceeding the threshold required for approval.

Nonetheless, traders remain optimistic about LUNC, as seen by the continued increase in the Open Interest (OI) indicator. LUNC’s open interest is currently around $30 million, reaching the annual high last observed before the FTX crash.

In the short term, a slight adjustment in LUNC prices is expected, but a rebound is expected. The current long/short ratio is 0.88, with over 53% of positions being short, indicating that the majority expect a decline in value.

What’s next for LUNC price?

LUNC price continues to surge, recording a 145% gain this week. However, this upward movement failed to gain any further momentum as the price declined from the high of $0.00028, suggesting a decline in interest in higher price levels. At the time of writing, LUNC price is trading at $0.000223, down more than 6% from yesterday’s price.

Currently, the bulls are strongly defending against a drop below $0.0002 because a drop below $0.0002 would strengthen the sellers’ position. However, the bears continue to apply pressure, sending the price below EMA20 on the 4-hours chart. The 20-day EMA is steady at $0.00021 and the Relative Strength Index (RSI) is trading at 60, falling out of overbought territory. This could mean that the trading range could hover around the bearish area of ​​the moving average.

If buyers push the price above $0.00028, it could surge to $0.00037. Conversely, if it falls below EMA20, it may fall to $0.00014.