The Terra Classic (LUNC) coin was unable to halt its previous long downward rally and fell precipitously around the $0.000221 mark. Terra Classic is one of the few major cryptocurrencies that did not gain traction in the previous month.
The reason for its recent downward rally, however, could be attributed to the recent filing of another lawsuit against Do Kwon, the co-founder of Terraform Labs.
JUST IN: 🇸🇬 #Terra CEO Do Kwon faces a lawsuit in Singapore, next hearing on Wednesday. #UnidefTimes $LUNA
— Unidef Times (@UnidefTimes) October 31, 2022
Another factor that could prevent Terra Luna from gaining traction is the Federal Open Meeting Committee meeting, which has announced another 75 basis point rate hike, reducing investor confidence in risky assets such as cryptocurrencies.
#Breaking | The US Federal Reserve hikes rates by 75 bps.
— CNBC-TV18 (@CNBCTV18Live) November 2, 2022
This is its fourth hike in a row of that caliber, as it battles high inflation.#Fed #FederalReserve #75bpsHike pic.twitter.com/GHNLMwsg19
Meanwhile, the collapse of several platforms in the previous year was viewed as another significant factor that kept the Terra Luna coin down, and regulators are currently tightening their grip on the cryptocurrency sector as a result.
In contrast, the positive crypto market, supported by a combination of factors, was viewed as one of the key factors that may help the Terra Luna coin limit its further losses.
The current Terra Classic price is $0.000221 with a 24-hour trading volume of $314 million. Terra Classic has dropped by more than 8% in the last 24 hours.
Terra is now ranked #36 on the market, with a market capitalization of $1.4 billion in real-time. The total number of LUNC coins in circulation is 6,590,540,703,117.
There are a few Important factors that could be linked to the LUNC’s ongoing bearish rally. One of these reasons is the ongoing legal action against Do Kwon, Terraform Labs’ co-founder. Kwon is now being sued in Singapore in a $57 million class action suit.
Do Kwon Faces $57M Lawsuit In Singapore
— The Coin Economista | Metaverse Insights (@CoinEconomista) October 30, 2022
The lawsuit alleges that Kwon and others made fraudulent claims about Terra’s stablecoin being “stable by design. The claimants are asking for a total compensation of about $57 million in losses and damages.https://t.co/2gnJnsADdi
According to the complaint, the TerraUSD (UST) stablecoin failed to maintain its 1:1 peg as a store of value following the collapse of the stablecoin in May.
Aside from that, the reason for the bearish rally could be linked to the fact that regulators are currently taking tougher measures against the crypto market, which has resulted in the failure of several platforms over the previous year.
Since the start of the day, the cryptocurrency market has been flashing green, as the world’s largest and most popular cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), have both managed to see marginal price increases over the past day, remaining stable at $20,000 and $1,500, respectively.
Other well-known cryptocurrencies, such as Litecoin (LTC) and Ripple (XRP), saw modest gains. As a result, the positive market has had little impact on the Terra Classic price thus far.
However, since the release of the US Federal Reserve’s rate hike decision, Terra and the rest of the cryptocurrency market has experienced a bearish correction.
Technically, the LUNC/USD pair has been rejected below the $0.000278 level, which is extended by a downward trendline.nAt the same time, Terra Luna is being weighed down by the 50-day moving average.
Terra Luna’s immediate support is at $0.000192, and a bearish breakout could expose it to the $0.000127 level. Terra has closed bearish engulfing candles on the daily timeframe, indicating the possibility of a selling trend continuation.
As a result, you should look for sell positions that are less than $0.000278. Terra Luna Classic may not end up at zero, but it is certainly struggling to maintain its momentum.