How The $60M AVAX Buyback Could Impact Terra Luna Classic Price

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Terra Luna Classic price has been trending upward since July, making higher highs except for the unexpected market-wide August 5 crash. However, following the development of the Terraform Labs (TFL) case and the subsequent liquidation of the company, Avalanche is seeking to buy back all the $60 million AVAX tokens that the Luna Foundation Guard (LFG) purchased as part of its portfolio to strengthen the UST algo-stablecoin.

While the AVAX price performed well after the announcement, jumping 17.5%, the LUNC community speculates how the inbound $60 million could impact the token’s price. Will it be used in a LUNC buy-back and burn?

Terra Luna Classic Price If $60M AVAX Is Used to Burn LUNC

The AVAX token buyback plan by the Avalanche Foundation provides the LFG with $60 million in funds to use as bankruptcy court orders. Meanwhile, the Terra Luna Classic community has taken full control of the blockchain’s leadership as TFL and LFG approach their final days.

If the community uses this $60 million to buy back and burn LUNC, the price of Terra Luna Classic will likely see a significant impact. The LUNC price is currently trading at $0.00008931, down 0.7% in the last 24 hours. A $60 million purchase of LUNC would equate to 671 billion coins, or about 12% of the total circulating supply, with a current market cap of $510 million. To maintain this market cap with 12% of the supply gone, the price would need to adjust 17% upward, reaching $0.0001.

The hype from the coin burn, combined with the potential 17% increase, could fuel Fear of Missing Out (FOMO), leading to a cascading effect that drives LUNC prices higher than $0.0001.

LUNC Price Action Looks Ready For A 53% Rally

The Terra Luna Classic price chart reveals a clear ascending channel pattern, indicating a gradual uptrend within well-defined support and resistance lines. This trend is bullish as the price is consolidating near the middle of the channel, suggesting a potential upward move to $0.00015

Key Support and Resistance Levels

0.00008400: The lower boundary of the channel is acting as a strong support. This level has held multiple times in the past and offers a good entry point for traders looking to buy dips.
0.0001500: The upper boundary of the channel is a key resistance zone. This is also near the projected Fibonacci extension target.

The long-term outlook for Terra Luna Classic price remains bullish as long as the price remains within the ascending channel or breaks above it. Targeting the $0.0001500 area provides a good risk-to-reward ratio, with the potential for extended gains if the broader market sentiment turns highly bullish.

If the LUNC price falls below the channel ($0.000084), it may signal market weakness, invalidating the current bullish thesis. LUNC may find further support below around $0.000073 and $0.000054.

AVAX BuyBack Can Send LUNC Flying

The $60 million AVAX buyback creates a significant opportunity for the Terra Luna Classic (LUNC) community. If the community uses these funds for a buyback and burn, the reduction in circulating supply could push LUNC’s price upward, potentially reaching $0.0001 or higher as crypto market sentiment shifts and FOMO develops.

Currently, the Terra Luna Classic price bullish ascending channel indicates a potential rally toward $0.00015 as long as it maintains support at $0.000084. However, a drop below this level could signal weakness and lead to further declines. The next few weeks will be critical in shaping LUNC price action in light of the AVAX buyback announcement.

Frequently Asked Questions (FAQs)

The $60 million buyback by the Avalanche Foundation could provide significant funds that the Luna Foundation Guard (LFG) may use, potentially impacting the LUNC price through buybacks and burns, thereby reducing the circulating supply and possibly increasing demand.

If the $60 million is allocated for buying back and burning LUNC, it could remove approximately 671 billion coins from circulation, equating to about 12% of the total supply.

The current trend for LUNC appears bullish, as the price is consolidating near the middle of the ascending channel, indicating a possible upward move in the near term.

Evans Karanja

Evans Karanja is a crypto analyst and journalist with a deep focus on blockchain technology, cryptocurrency, and the video gaming industry. His extensive experience includes collaborating with various startups to deliver insightful and high-quality analyses that resonate with their target audiences. As an avid crypto trader and investor, Evans is passionate about the transformative potential of blockchain across diverse sectors. Outside of his professional pursuits, he enjoys playing video games and exploring scenic waterfalls.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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