The price of Luna Classic (LUC) has increased nearly fivefold over the past two weeks. However, it has reached an important confluence of Fibonacci resistance levels, which could be the catalyst for a short-term decline.
This Friday, September 9, Binance announced the launch of LUNC futures with up to x25 leverage. Futures contracts will be settled in the stablecoin USDT. This announcement follows a massive price rise of nearly 500% over the past two weeks.
Additionally, Binance announced its support for the 1.2% tax burn for LUNC and USTC transactions. This token burning tax is expected to be implemented on September 20 at the height of the Terra Classic block of 9,475,000.
However, it is worth mentioning that cash and margin trading will not be affected by this tax burn. On the contrary, it will only be valid for deposits and withdrawals.
It should also not be forgotten that the supply has increased to 6.2 trillion since the “Death Spiral” situation of the token. So, despite its incremental value of $0.00045, Luna Classic is ranked 27th by its market capitalization.
The potential ceiling of LUNC
LUNC’s price has been rising since August 25. So far, this bullish move has led to a high of $0.00059 reached on September 8th.
Despite this massive rise, Luna Classic hit two important Fibonacci resistance levels; the 4.2-4.61 extension of the initial bullish move (in red) and the 1.61 length of waves one and three (in white). It is therefore possible that the price will soon reach a ceiling, if it has not already done so.
This possibility is supported by the RSI, which has generated a bearish divergence (green line), indicating that a downward move may soon follow.
LUNC began to decline later in the day on Friday and fell to a low of $0.00036, a drop of almost 40% from its high. Price then rebounded and created a long lower wick (green arrow).
Nevertheless, it looks like the price is stuck in a corrective ABC pattern that could end between the 0.5-0.618 Fibonacci retracement support levels of $0.00028-$0.00034.
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