LUNC, the native token to the original Terra blockchain, which is called Terra Classic, is an underperformer on Thursday, nursing losses of about 5.5% in the last 24 hours. LUNC/USD was last changing hands in the mid-$0.00014s, down about 20% from its earlier weekly highs above $0.00018, but still up about 15% from monthly lows in the $0.000127 area.

LUNC pulls back sharply from 200DMA. Source: TradingView

LUNC’s abrupt turnaround in recent days comes after the cryptocurrency failed to sustain an attempted push to the north of its 200-Day Moving Average. The fact that the cryptocurrency has now dipped under its 21 and 50DMAs as well suggests the near-term technical outlook might not look too great. But there is some reason to be optimistic and, as a result, near-term price predictions shouldn’t be too pessimistic.

Price Prediction – Can LUNC Rally in the Short Term?

LUNC’s latest pullback has seen it fall back to come close to testing a downward trendline that had previously been acting as resistance but may now switch to acting as support. That may be enough to encourage the bulls to re-enter the market and start buying the dip. If so, LUNC could be looking at a short-term rally back to its recent highs in the $0.00018-20 area

LUNC eyeing a bounce from prior downtrend. Source: TradingView

Indeed, the breakout from the downtrend that had dominated LUNC price action since September suggests that the cryptocurrency’s medium-term prospects for early 2023 are looking much better. Of course, in the absence of a broader crypto market rebound in early 2023, going to be difficult for LUNC to get back to its September highs in the $0.0006 area.

LUNC Poised for Upside in 2023?

Some crypto bulls are hopeful for a “pivot” from the Fed towards offering more dovish guidance on its plans for interest rates as inflation comes down and the economy weakens. This would be expected to give a broad lift to risk assets, including cryptocurrencies like LUNC.

In that sense, if there is a positive shift in macro conditions in the coming months, then LUNC could be poised for a break higher in 2023, alongside broader cryptocurrency markets. But its not only macro conditions that could give LUNC a lift in 2023.

The LUNC community recently passed a proposal to change to LUNC’s tokenomics. Since the hyperinflation of May triggered as a result of the depeg of UST, the LUNC community has been focused on trying to implement mechanisms to bring down the LUNC token supply. But a recent proposal (10983) had introduced a new measure where 50% of burnt tokens could be reminted.

However, earlier this week, another proposal passed reneging on this less deflationary policy, with its supporters arguing that reminting tokens would deter investment into LUNC. That means LUNC has returned to taxing 0.2% of all transactions, with 90% of this supply burnt and 10% send to the community pool. One Terra Classic supporter said that this might encourage Binance to continue with their monthly LUNC burns.

(by Joel Frank)