In the 30 days since LUNC was rescued by the crypto underground, it has seen a tremendous bull-run. LUNC, the native token of Terra Classic Network, has seen a lot controversy since it saw its value drop by over 99% in a year.
As of the writing time, LUNC is trading at $0.0005 with a 23% profit for the last 24hrs and a 140% profit for the past week. Coingecko reports a combined total of more than 400% profits over the last two weeks. Is this price action sustainable though?
LUNC Price shorts pile in, will they get rekt?
The funding rates in the derivatives industry turned negative as LUNC prices grew to the upside. This indicator shows the amount of traders who take longs and shorts, as well as the proportion that each side pays.
When funding rates fall, market participants will be short of liquidity or bet on the crash price. However, when rates rise, it is the reverse. A pseudonym user claims that the funding rates are as follows: funding rates for the LUNC/USDT pair reached -0.48% at some point during today’s trading session.
This means that short positions were accumulated on LUNC’s bullish momentum. If the cryptocurrency continues trading to the upside and fuels the bull market, then these short positions may be liquidated.
The LUNC/USDT trades have seen an increase in open interest (OI) over the last 12 hours. The OI Bot data claims that the cryptocurrency witnessed a rise of 30% in Open Interest (OI) with many positions increasing by millions in just a few hours.
Huge open interest range spotted at : $LUNC
In the last five minutes, OI rose by 16.63%
More than 2,939.702$ have been added.⬆️⬆️
— OIB – Crypto Open Interest Variations Bot (@OIAlertBot) September 8, 2022
What’s Behind The LUNC Price Rally?
A community proposal has now been submitted to support the LUNC price actions. It proposes a burn mechanism that would allow cryptocurrency users to use their coins. It was approved by the community a few weeks after it was submitted in late July 2022.
Some people seem to be betting on LUNC making a comeback based on this new mechanism that will “Burn” 1.2% of the cryptocurrency’s supply while re-enabling the staking mechanism. This proposal is:
Terra v1 Governance Community (which includes validators), will decide on the most trusted path to distribute the code. It proposes the code and the distribution path.
The time will show if the burning mechanism is enough to bring LUNC back to its glory, or if it will only be temporary before cryptocurrency returns to its previous lows.