While the entire cryptocurrency market remains largely stagnant, Terra Classic is going through tough times. Price charts across all timeframes indicate a downtrend, and the total value locked (TVL) in assets on the Terra Classic Blockchain has been moving towards all-time lows since its launch. Although the short-term outlook may seem negative, there are 5 driving factors that could help the altcoin project, which has rebranded as Terra Classic (LUNC), overcome the significant obstacle of surpassing the $0.1 level and return to its past price levels. Here are those driving factors.
Major Capital Inflow
As with other cryptocurrencies, a capital inflow from a large investor or investor group to Terra Classic can help boost the altcoin’s price due to the supply and demand dynamics, as it recognizes the potential within and buys a significant amount of LUNC.
Currently, LUNC has a market value of $448.35 million and is ranked 80th in terms of market capitalization among the largest cryptocurrencies. Bitcoin (BTC) takes the top spot with $573.64 billion, followed by Ethereum (ETH) with $222.21 billion.
Growth of the Ecosystem
If the Terra Classic team can find a way to attract more blockchain developers to create new projects or decentralized applications (dApps) on the network, the increased demand from users and investors can lead to a significant rise in the native asset LUNC’s price.
Currently, one of the most important supporters of LUNC is Binance, one of the world’s largest cryptocurrency exchanges. Binance recently supported the latest network upgrade. In addition, the Terra Classic team is focused on reducing the circulating supply of LUNC and the stablecoin TerraClassic (USTC) through revisions to its burning mechanism. This can be a significant supportive factor for the price increase of LUNC.
Positive News Flow from the SEC Lawsuit
Another factor that could have an impact on the potential price increase of Terra Classic is the success of Terraform Labs representatives in the lawsuit filed by the U.S. Securities and Exchange Commission (SEC), which claims that the issued digital asset is a security.
On June 15th, the company’s representatives, along with their legal team, faced the SEC in a Manhattan court to prove the opposite of the SEC’s claim. The court partially ruled in favor of Ripple, a blockchain company, in the lawsuit filed by the SEC against Ripple and its digital asset XRP. If the court gives any positive decision in favor of Terraform Labs against the SEC, it could help the price increase of LUNC.
Time
Considering that LUNC has been in a downtrend for months and the cryptocurrency market tends to go through boom and bust cycles, it shows that it is possible for the altcoin to hit rock bottom in the bust cycle and then enter a boom cycle, reaching a price of $0.1 over time.
However, it is important to remember that the cryptocurrency market is highly volatile and unpredictable. This means that anything can happen over time, and investors need to make their own assessments, carefully follow the news surrounding the asset, and consider their risk tolerance before investing a significant amount of money.
Market Sensitivity
The overall sensitivity of the cryptocurrency market and macroeconomic factors also have significant effects on altcoins like Terra Classic. Particularly, larger-scale positive developments and overall positive or negative news flow about the sector have a major impact on price increases or decreases.
Positive developments in the cryptocurrency market generally contribute to a sense of overall market bullishness, increasing the likelihood of people approaching cryptocurrencies with expectations of a rise. This applies to LUNC as well.
