Terra Luna Classic price has been trending upward since July, making higher highs except for the unexpected market-wide August 5 crash. However, following the development of the Terraform Labs (TFL) case and the subsequent liquidation of the company, Avalanche is seeking to buy back all the $60 million AVAX tokens that the Luna Foundation Guard (LFG) purchased as part of its portfolio to strengthen the UST algo-stablecoin.
While the AVAX price performed well after the announcement, jumping 17.5%, the LUNC community speculates how the inbound $60 million could impact the token’s price. Will it be used in a LUNC buy-back and burn?
Terra Luna Classic Price If $60M AVAX Is Used to Burn LUNC
The AVAX token buyback plan by the Avalanche Foundation provides the LFG with $60 million in funds to use as bankruptcy court orders. Meanwhile, the Terra Luna Classic community has taken full control of the blockchain’s leadership as TFL and LFG approach their final days.
If the community uses this $60 million to buy back and burn LUNC, the price of Terra Luna Classic will likely see a significant impact. The LUNC price is currently trading at $0.00008931, down 0.7% in the last 24 hours. A $60 million purchase of LUNC would equate to 671 billion coins, or about 12% of the total circulating supply, with a current market cap of $510 million. To maintain this market cap with 12% of the supply gone, the price would need to adjust 17% upward, reaching $0.0001.
The hype from the coin burn, combined with the potential 17% increase, could fuel Fear of Missing Out (FOMO), leading to a cascading effect that drives LUNC prices higher than $0.0001.
LUNC Price Action Looks Ready For A 53% Rally
The Terra Luna Classic price chart reveals a clear ascending channel pattern, indicating a gradual uptrend within well-defined support and resistance lines. This trend is bullish as the price is consolidating near the middle of the channel, suggesting a potential upward move to $0.00015
Key Support and Resistance Levels
0.00008400: The lower boundary of the channel is acting as a strong support. This level has held multiple times in the past and offers a good entry point for traders looking to buy dips. 0.0001500: The upper boundary of the channel is a key resistance zone. This is also near the projected Fibonacci extension target.
Terra Luna Classic Price
The long-term outlook for Terra Luna Classic price remains bullish as long as the price remains within the ascending channel or breaks above it. Targeting the $0.0001500 area provides a good risk-to-reward ratio, with the potential for extended gains if the broader market sentiment turns highly bullish.
If the LUNC price falls below the channel ($0.000084), it may signal market weakness, invalidating the current bullish thesis. LUNC may find further support below around $0.000073 and $0.000054.
AVAX BuyBack Can Send LUNC Flying
The $60 million AVAX buyback creates a significant opportunity for the Terra Luna Classic (LUNC) community. If the community uses these funds for a buyback and burn, the reduction in circulating supply could push LUNC’s price upward, potentially reaching $0.0001 or higher as crypto market sentiment shifts and FOMO develops.
Currently, the Terra Luna Classic price bullish ascending channel indicates a potential rally toward $0.00015 as long as it maintains support at $0.000084. However, a drop below this level could signal weakness and lead to further declines. The next few weeks will be critical in shaping LUNC price action in light of the AVAX buyback announcement.
The post How The $60M AVAX Buyback Could Impact Terra Luna Classic Price appeared first on CoinGape.
