The value of the famed algorithmic stablecoin TerraClassicUSD (USTC) of the Terra (LUNA) ecosystem has increased despite the recent worldwide crypto market downturn.
The token increased dramatically during the past two weeks, rising from $0.008 on June 23 to $0.065 on July 4. The cryptocurrency reached a high of $0.089 on June 29 during the time frame according to TradingView data.
Notably, the rise has taken place following USTC’s loss of the dollar’s peg in May, when it crashed below $0.1 along with the rest of the Terra ecosystem.
It is difficult to pinpoint the motive force behind USTC’s resurgence, especially after all prospects for revival were dashed by the collapse of the Terra ecosystem. After founder Do Kwon became embroiled in fresh claims of fraud relating the crash, there was less chance of a rebirth.
Since developers are no longer using the original Terra blockchain to run decentralized applications (dApps) and other protocols, USTC is currently regarded as a dead token.
As a result, the pump can be ascribed to the activity of multiple cryptocurrency whales who are drawn to the coin despite its limited liquidity. Notably, these whales use their resources to artificially inflate the price in an effort to profit immediately.
Another possible driver for the rally could be the input of retail investors who are buying in the dip considering that the coin has become considerably cheap compared to its initially intrinsic value.
Retail investors’ acquisitions during the drop, when the coin is still relatively inexpensive compared to its initial intrinsic worth, may also be a factor in the rally.
Investors are simultaneously hopeful the token will finally restore its peg in the long run along with the fear of missing out (FOMO) because of the price increase. It’s interesting to note that other tokens in the original Terra ecosystem have recently had substantial rallies as well.