The LUNC token from the defunct Terra Classic blockchain experienced a similar increase prior to the dramatic rally of LUNA, the restored Terra network’s currency.
Following a dramatic collapse earlier this year, the Terra blockchain’s cryptocurrency, LUNA, was recreated. On Friday, the price of LUNA tripled in a short period of time, trading close to the all-time high set when the token was first introduced in early June.
According to data from cryptocurrency price tracker TradingView, the token’s price surged from $1.77 $ to $7.66 within a week, representing a 332% rise on significantly greater trading volume.
The native coin of the second iteration of the Terra blockchain, which was revived following Terra’s collapse in May, which resulted in the loss of $60 billion in value, is called LUNA. Investigations of fraud against Terraform Labs, the company that developed the blockchain, and its founder Do Kwon followed the implosion. The old blockchain now goes by the name Terra Classic and is home to the stablecoin USTC and the token Luna Classic (LUNC).
Risky investments like cryptocurrencies seem to be broadly rising on Friday in a relief rally as several economic indicators point to a slowing global economy and traders consider the possibility that the Federal Reserve may scale back rate hikes earlier than anticipated or even cut interest rates next year.
Traders became enthusiastic about a new burn program that would reduce the token’s inflated supply, which has caused LUNC to rise as well. Since then, the rise has somewhat halted, and the coin has fallen 17% from its most recent high.
Crypto market observers are perplexed by LUNA’s erratic price movement because there hasn’t been any network-specific news or development that would spark excitement among retail traders.
Data from the social asset analytics platform for digital assets LunarCrush indicates a recent surge in social media mentions and engagements is indicative of a retail speculative frenzy.
The new Terra blockchain has so far had difficulties attracting investors to its ecosystem. According to DeFi data tracker DeFiLlama, the network’s total value locked (TVL), a key metric in decentralized finance (DeFi) that gauges how much value a protocol can amass from investors, stood at a pitiful $51 million at press time. In contrast, the “old” Terra Classic blockchain’s TVL reached more than $20 billion in May before its collapse.