© Reuters
Investing.com – Classic posted several impressive daily gains last week, but the price has pulled back significantly from its peak.
The rally was triggered by the announcement of the application of a 1.2% combustion tax on all transactions. The community has thus laid the foundations for a deflation of the LUNC and a decrease in the tokens in circulation with each transaction. Several well-known cryptocurrency exchanges pledged their support for this project, which caused a buying frenzy in the market.
However, the news that an arrest warrant was issued for Terra founder Do Kwon brought back bad memories, which weighed on the price. Besides the accusation of having played an instrumental role in the collapse of the Terra blockchain, breaches of securities law have also been noted.
In the ranks of , we now hear that the company acts completely independently of TerraForm Lab (TFL) and Do Kwon.
The two community members Edward Kim and Alex Forshaw have even published a plan to revive the stablecoin TerraClassicUSD. This was the source of the unease when it lost parity with the dollar, resulting in the minting of huge amounts of Terra Luna.
To ensure the sustainability of the blockchain in the long term, it is almost essential to restore the stablecoins. Kim and Forshaw are convinced that only then will the many crypto projects that have migrated in the meantime return:
“The blockchain became insolvent (it stopped paying its credits), and the 10.3 billion USTCs still in circulation turned into some $9.5 billion in bad debts.
…by resurrecting – and drastically improving – the decentralized stablecoin, we can turn one of cryptocurrency’s biggest defeats into the most amazing turning point in the history of digital investments.”
However, this cannot be done without debt restructuring. For this, the community will have to find at least part of the unpaid debts.
Important technical thresholds for Terra Classic
The 61.8 percent Fibo retracement of $0.0002775 still offers good support as it has resisted downward pressure so far based on the daily closing price.
While this is the case, a rally towards the 50 percent Fibo retracement of $0.0003375 and the 38.2 percent Fibo retracement of $0.0003975 may take place.
Only in the event of a sustained decline below the 61.8 percent Fibo retracement should we expect an extension of losses towards the psychological threshold of $0.0002. This support is reinforced by the 78.6% Fibo retracement at $0.0001921.
By Marco Oehrl