- LUNC’s price slump is driven by large-scale exchange transfers, market instability, and investor uncertainty over staking and liquidity.
- DeepSeek’s market impact, burn tax concerns, and competition from faster blockchains add further pressure on LUNC’s long-term outlook.
Terra Luna Classic (LUNC) has been facing a sharp decline, with its price dropping over 10% in the past week, raising concerns among investors. On Tuesday, the downturn continued, driven by large-scale wallet drains, increased exchange transfers, and broader market instability. These factors have contributed to bearish sentiment, putting pressure on LUNC’s market performance.
Massive Fund Transfers Spark Bearish Sentiment
According to the Terra Luna Classic community, a substantial volume of LUNC has been moving from private wallets to major exchanges like Binance, Kraken, and Cryptex. A consistent transfer of over 1 billion tokens into Cryptex before distribution to other exchanges has fueled speculation of potential sell-offs. As exchange supply rises, traders are reacting with caution, further intensifying downward pressure on the asset.
In addition, a recent tweet from Terra Classic Validator Lunanauts provided insights into why numerous LUNC wallets are being emptied and moved onto exchanges.
🚨Why are lots of #LUNC wallets being emptied and moved onto exchanges?
🤔Let’s find out 👇🏽👇🏽👇🏽
The recent movement of substantial Terra Classic (LUNC) holdings from individual wallets to exchange hot wallets, such as Binance, Bitkub, Kraken, and Cryptex, is driven by… pic.twitter.com/gAcRp9NyCO
— 🌠 Terra Classic 🌠 Validator by Lunanauts (@Lunanauts_Lunc) January 28, 2025
The emergence of DeepSeek, an open-source Chinese AI startup, has shaken global markets, causing a significant downturn in major tech stocks like Nvidia, Microsoft, and Meta. This turbulence spilled over into the crypto market, dragging down Bitcoin (BTC), Ethereum (ETH), and LUNC as investors shifted away from riskier assets.
Liquidity Moves, Staking Uncertainty, and New Developments
At the same time, LUNC’s large-scale transfers have led to a phase of consolidation, raising liquidity while increasing staking activity. However, concerns remain that unstaking and further sell-offs could follow, prolonging the bearish sentiment.
Meanwhile, in line with prior coverage by Crypto News Flash (CNF), LUNC News recently highlighted an update from New Protocol on Terra Classic, hinting at an upcoming testnet launch. This development could introduce new opportunities for the Terra Classic ecosystem, potentially impacting LUNC’s future trajectory.
Burn Tax and Blockchain Performance Concerns and LUNC Price Outlook
LUNC transactions are subject to a burn tax, leading investors to send smaller amounts before committing to larger transfers. While this increases network activity, it also slows transaction speeds. Some traders may consider shifting to faster-performing blockchains with lower burn taxes, adding another challenge for LUNC.
Currently, according to CoinMarketCap, LUNC is trading at $0.00007618, down 13% weekly and 32% for the month. A slight 3% daily gain reflects broader market movements, but uncertainty remains as investors monitor the token’s next moves.
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