The Terra ecosystem has exploded back into the spotlight in recent weeks, driven by massive surges in the prices of Luna Classic (LUNC) and the new LUNA token. LUNC has been particularly dominant, breaking through resistance level after resistance level as traders pile back into the formerly collapsed token.
Several factors are contributing to this resurgence. A new LUNC proposal to enact a minimum validator commission of 5% and implement other technical upgrades has gained unanimous support so far. This change aims to improve network security after issues with the validator commission being set too low. The Terra community has also voted to halt all TerraUSD minting, removing instability.
With these positive developments, LUNC prices have pumped hard, now trading around $0.0000658 after hitting a peak above $0.000065. Short liquidations have spiked over $20K as trading activity explodes. However, the long-short ratio has dipped below 1, signaling the rally may be overextended.
LUNC previously rebounded in a range between $0.00006 and $0.000067 before the latest breakout. It now faces resistance around $0.000067, with bulls aiming for $0.000072 next if the uptrend continues. But overbought RSI levels suggest a pullback is likely first.
On the downside, support lies at $0.000064 and $0.000058. Falling below the 20-day EMA at around $0.000061 would confirm waning momentum. LUNA faces similar resistance and profit-taking headwinds after its own rally.
Overall, the revived interest and upside price potential for LUNC and LUNA show the Terra ecosystem still retains substantial investor interest. But traders should be cautious of sharp pullbacks as the rallies cool off from overheated levels in the short term.
