LUNC Plunges 14% As SEC Scores Knockdown Blow Vs. Terraform Labs

Christian Encila

1 year ago

3 mins read

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LUNC, the resilient token emerging from the tumultuous aftermath of Terra’s downfall, witnessed a notable 14% downturn, mirroring a substantial legal setback delivered by a U.S. District Court.

This judicial decision favored the Securities and Exchange Commission (SEC) in their legal pursuit against Terraform Labs, the entity steering the Terra blockchain, injecting uncertainty into the fate of the beleaguered cryptocurrency.

Harking back to the SEC’s assertions in February, the once-mighty stablecoin, LUNA, now lies at the heart of the controversy that unfolded in May 2022. The SEC contends that LUNA transcended the classification of a digital dollar, deeming it a security.

Additional Pain For LUNC

Crucially, Terraform Labs allegedly neglected to register it as such. The gravity of the situation intensifies as Do Kwon, co-founder of Terraform Labs, faces accusations of orchestrating the sale of these unregistered securities, placing additional strain on the future trajectory of LUNC.

Judge Jed Rakoff’s definitive ruling echoes a harsh reality – both LUNA and MIR, another token within the Terra ecosystem, are recognized as securities. This legal stance paves the way for potential further action by the SEC against Terraform Labs, casting a shadow over LUNC’s future.

Source: Santiment

The abrupt shift in market sentiment is evident as LUNC’s Weighted Sentiment, a metric gauging market optimism, plummeted to -0.510 post-ruling. This stark transformation from bullish to bearish suggests a loss of investor confidence in the short-term prospects of the token.

Social Dominance, reflecting the attention given to LUNC, experienced a surge on December 29th, correlating with the court ruling. However, this heightened interest quickly dissipated, indicating that the initial impact was ephemeral, and traders may have swiftly incorporated the negative developments into their decision-making.

LUNCUSD currently trading at $0.000142 territory. Chart: TradingView.com

LUNC Price Analysis: Overall Downtrend With Potential For Reversal

The chart (below) confirms a downward trend over the past seven days, mirroring the bearish sentiment post-court ruling.
However, technical indicators suggest a potential for reversal:
- RSI: Dipping towards the oversold zone, implying a possible price rebound.
- Negative Divergence: Hints at an upcoming uptrend, though the legal uncertainty adds complexity.
- EMAs: The recent 20 EMA crossover above the 50 EMA offers a bullish signal, albeit weak.

LUNC seven-day price chart. Source: Coingecko

Impact Of Court Ruling:

The sharp drop on December 29th coincides with the ruling, highlighting its significant impact.
Continued bearish momentum suggests ongoing concerns about the legal and regulatory landscape.

Support And Resistance Levels:

Support: The $0.00013 area has acted as a barrier, holding price from further decline. Maintaining this level is crucial for bullish momentum.
Resistance: Breaking above the $0.00015 level could signal a stronger uptrend, but overcoming psychological resistance may be challenging.

Volume And Historical Trends:

Low volume indicates investor indecision, possibly due to the legal uncertainty.
Comparing to historical trends:
- Previous support and resistance levels offer limited guidance due to the recent crash.
- Past volatility patterns might not be reliable given the unique legal context.

Overall:

The technical indicators present a potential for LUNC reversal, but the court ruling casts a shadow of uncertainty. Closely monitor key support and resistance levels, watch for changes in volume, and remain cautious due to the volatile market conditions.

Featured image from Shutterstock

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

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