LUNC, the resilient token emerging from the tumultuous aftermath of Terra’s downfall, witnessed a notable 14% downturn, mirroring a substantial legal setback delivered by a U.S. District Court.
This judicial decision favored the Securities and Exchange Commission (SEC) in their legal pursuit against Terraform Labs, the entity steering the Terra blockchain, injecting uncertainty into the fate of the beleaguered cryptocurrency.
Harking back to the SEC’s assertions in February, the once-mighty stablecoin, LUNA, now lies at the heart of the controversy that unfolded in May 2022. The SEC contends that LUNA transcended the classification of a digital dollar, deeming it a security.
Additional Pain For LUNC
Crucially, Terraform Labs allegedly neglected to register it as such. The gravity of the situation intensifies as Do Kwon, co-founder of Terraform Labs, faces accusations of orchestrating the sale of these unregistered securities, placing additional strain on the future trajectory of LUNC.
Judge Jed Rakoff’s definitive ruling echoes a harsh reality – both LUNA and MIR, another token within the Terra ecosystem, are recognized as securities. This legal stance paves the way for potential further action by the SEC against Terraform Labs, casting a shadow over LUNC’s future.
Source: Santiment
The abrupt shift in market sentiment is evident as LUNC’s Weighted Sentiment, a metric gauging market optimism, plummeted to -0.510 post-ruling. This stark transformation from bullish to bearish suggests a loss of investor confidence in the short-term prospects of the token.
Social Dominance, reflecting the attention given to LUNC, experienced a surge on December 29th, correlating with the court ruling. However, this heightened interest quickly dissipated, indicating that the initial impact was ephemeral, and traders may have swiftly incorporated the negative developments into their decision-making.
LUNCUSD currently trading at $0.000142 territory. Chart: TradingView.com
LUNC Price Analysis: Overall Downtrend With Potential For Reversal
- The chart (below) confirms a downward trend over the past seven days, mirroring the bearish sentiment post-court ruling.
- However, technical indicators suggest a potential for reversal:
- RSI: Dipping towards the oversold zone, implying a possible price rebound.
- Negative Divergence: Hints at an upcoming uptrend, though the legal uncertainty adds complexity.
- EMAs: The recent 20 EMA crossover…
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