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Terra Classic (LUNC) continues to experience turbulence. Since December 2023, the altcoin has lost about two-thirds of its capital, facing significant selling pressure. Additionally, LUNC has fallen out of the top 100 cryptocurrencies by market value, signaling a loss of strength to investors.
Current State of LUNC
Notably, LUNC’s market capitalization dropped to $525.74 million as of January 24, and at the time of writing, it was trading at $0.00009038. This indicates that LUNC’s market value has decreased by $200 million within a week. According to CMC data, on January 16, LUNC had a market cap of $727.11 million.
The end of the previous year was incredibly successful for Terra Classic, reaching its peak market value of $1.5 billion on December 4. This mini bull run occurred amidst a general excitement for altcoins. However, right after this, the decline began, and LUNC experienced fluctuations due to a significant sell-off within just a few weeks.
Bankruptcy Filing by Terraform Labs
One of the triggers of the massive collapse in 2022, Terraform Labs, the creator of TerraUSD, has filed for Chapter 11 bankruptcy in the US, according to court documents that emerged on Sunday. The Singapore-based company filed for bankruptcy in Delaware, unable to withstand the pressure of assets and liabilities ranging between $100-500 million.
With the latest news, the confidence of the Terra Classic ecosystem and LUNC investors may have diminished. On the other hand, while the general downturn in the entire crypto market continues, LUNC seems to have taken an even harder hit due to the bankruptcy filings.
While all this is happening, Terra (LUNA) also filed for bankruptcy in the same period and has lost more than half of its market value. At the time of writing, LUNA is trading at $0.5706 with a market cap of $362.61 million, ranking 131st.
After the bankruptcy, it wouldn’t be wrong to say that the future of both cryptocurrencies has become uncertain due to the loss of trust. Currently, there is a peak in uncertainty about whether the LUNC and LUNA projects, thought to be in recovery, can regain their strength. While this is happening, some groups may believe the price will rise. Consequently, the LUNC community appears to have called for “buying the dip,” which investors should approach with caution.
