The recent downturn in the crypto market last Friday, influenced by worries surrounding Silvergate Bank, had a significant impact on Luna Classic (LUNC), the digital currency underpinning the initial, now largely inactive, Terra blockchain ecosystem.
Following a decline of over 10% from approximately $0.00017 to close to $0.00015 on Friday, the digital coin has marginally retreated further, settling in the mid-$0.00014 range.
Price Prediction – Where Next for LUNC?
Previously, the zone around $0.0001550 was seen as a crucial support level; however, now it is likely to act as an immediate resistance area. Concurrently, traders are keeping an eye on another support level slightly below $0.00014, corresponding to a low from late 2022.
As the overall cryptocurrency market looks for stability amidst an upcoming week filled with major economic events – notably a slew of critical US employment data and a statement from Federal Reserve Chair Jerome Powell to the US Congress – enthusiasts of LUNC are optimistic that the cryptocurrency will sustain its position above this benchmark, as it did the past Friday.
Should this support zone be breached, there’s a notable chance that LUNC could revisit its late 2022 lows around the $0.000127 mark. If this happens, the decline from LUNC’s peak in 2023 of around $0.00021 would amount to a significant 40% drop.
Singapore Opens Investigation into Terraform Labs
Crypto media outlets on Monday highlighted that Singapore’s authorities have initiated a probe into Terraform Labs, the entity responsible for the Terra blockchain’s development.
Singapore was the original incorporation site for Terraform Labs, and for an extended period, Do Kwon, the brain behind the blockchain, resided there.
Do Kwon, of South Korean origin, is currently sought by the South Korean law enforcement agencies. Present speculations suggest he might be concealing himself in Serbia. The urgency to locate Kwon stems from his involvement in the dramatic downfall of the Terra blockchain ecosystem this past May. This event led to the algorithmic stablecoin UST losing its parity with the US dollar, subsequently instigating an intense hyperinflationary cycle in LUNC. This chaos resulted in a staggering $40 billion vanishing from the Decentralized Finance (DeFi) landscape, the impacts of which persist today.
Moreover, the US Securities and Exchange Commission has slapped accusations of fraudulent activities on both Do Kwon and Terraform Labs. The agency also alleges that Kwon diverted over $100 million in Bitcoin, misappropriating funds from the Luna Foundation Guard.