Much-hyped Terra Classic (LUNC) 1.2% tax burn policy, which went live not long ago, had many believe that it would permanently change LUNC’s course.
Over 18 billion LUNC tokens have already been burned, which is more than 0.268% of the total supply of the asset.
It is worth noting that more than five billion LUNC tokens have been burned with tax, demonstrating the effectiveness of the burn protocol.
The announcement last month by Binance that it would also use the 1.2% tax burn mechanism was another significant development for LUNC. Binance kept its word and burned a whopping eight billion tokens.
All of these encouraging events did not quite help LUNC on the price front, which dropped more than 6% in value during the past week, according to CoinMarketCap.
The coin’s price at the time of writing was £0.00025. Surprisingly, despite the lacklustre performance, some on-chain metrics favoured LUNC and suggested a potential uptick in the pipeline.
In addition, LUNC made it to the top 10 coins list according to LunarCrush AltRank, a bullish indication that inspires investors with optimism.
In terms of on-chain metrics, development activity increased last week after falling the week before, which is encouraging for a blockchain. Additionally, an increase in social dominance on October 12 resulted in increased popularity for the asset.
Furthermore, as investors’ confidence in LUNC increased, positive sentiment also responded in tandem.
However, the rise in the volume of the token followed a drop over the past day, which could be interpreted as a setback for LUNC.
Further evidence that everything was not as hunky-dory as it seemed was provided by LUNC’s daily chart. Several market indicators revealed that the bears were preparing, which would cause LUNC to drop even further.
Over the past week, LUNC’s Chaikin Money Flow (CMF) and Relative Strength Index (RSI) decreased and were seen in the neutral region.
A battle between the bulls and the bears was evident in the MACD reading, with the latter having a little advantage.
The distance between the 20-day exponential moving average (EMA) and the 55-day EMA also appeared to be narrowing recently, according to the Exponential Moving Average (EMA) Ribbon. Therefore, traders should proceed with prudence.