Terra Classic Pumped and Then Dumped, What's Behind the Recent Volatility?

Terra Classic (LUNC), the original chain of the defunct Terra (LUNA) ecosystem, has seen significant price volatility, providing a ray of hope amid weeks of bearish sentiment. Indeed, the improvements come as the LUNC community executes numerous efforts seeking to provide the network with usefulness. 

According to CoinMarketCap data, the jump was mostly attributed to increased buying pressure, boosting LUNC's market capitalization to $635.9 million, with over $138 million streaming into the token in just one day. 

The revival coincides with the announcement of the v2.1.0 upgrade proposal, which has received a lot of attention. The upcoming update, scheduled for June 14th, is the Terra Classic blockchain's third substantial improvement. 

However, the gains didn't hold up well and declined almost 15% the next day. Let's see what caused the sudden downfall of Terra Luna Classic.

Terra Classic Dumped 15% of its Gain

Despite LUNC's 35% gain on June 4, the asset fell as the much-anticipated v 2.1.0 upgrade was announced to be delayed. 

The drop comes after the US Securities and Exchange Commission (SEC) charged the largest cryptocurrency exchange, Binance, and its CEO, Chang Peng Zhao (CZ), with securities violations.

Despite the fact that Do Kwon, co-founder of Terraform Labs, was granted bail on June 2, the Terra classic prices didn't show much movement. 

The Basic Court in Podgorica issued an official statement stating that the State Prosecutor's Office's appeal against an earlier bail agreement was denied, allowing both Kwon and Terraform Labs' chief financial officer, Han Chang-Joon, to remain in the country under house arrest pending further legal proceedings.

During a hearing on May 12, the court reinstated the same bail requirements. Under these circumstances, both Kwon and Chang-Joon must pay 400,000 euros ($436,000) each to guarantee their release from detention. They are, however, now subject to rigorous bail terms and are not permitted to leave Chang-Joon's legal abode in Montenegro.

All the news just added enough volatility at once on Terra Ecosystem that Terra Classic surged and then declined instantly after topping the gainer's list.

Terra Classic Price Analysis

Terra Luna Classic (LUNC) is currently trading at $0.00008556 with a 24-hour trading volume of $114,166,859. This represents a -14.09% drop in the last 24 hours and a -1.21% drop in the last 7 days. Terra Luna Classic has a market cap of $501,812,519 and a circulating supply of 5.9 Trillion LUNC.

On a  daily timeframe, the Terra Classic is making a declining trend pattern which is generally a bullish pattern. However, on Monday, the pattern was broken and prices reached above the resistance making a bullish momentum. The 50-Day moving average can also be seen varying over the price shift from $0.001 to $0.000092 which confirms the bearish pressure.

The 14-day RSI is at 47 which indicates a neutral zone. However, the line could be seen heading downwards which means that there are no to little bullish gains and hence, bears are dominating the market.

Source: TradingView

Conclusion

In conclusion, Terra Classic is experiencing a heavy bearish pressure and the sell-off is getting worse. There is no positive news right now which could attract investors into the Terra ecosystem due to which, bullish regains possibly take more time. Overall, the market sentiment is negative.