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Why did Terra Classic (USTC) Rally 300% in a Day?

by BSCN

November 27, 2023

chain

Terra Classic (USTC) witnesses an extraordinary surge, with prices skyrocketing by 300% in just 24 hours. Let's delve into the potential catalysts driving this remarkable upswing.‍

Summary

  • USTC witnessed 300% surge in 24 hours, reaching $0.069, marking a 298% gain over the past week.
  • Terra Classic Labs strategically acquires 25.6 million USTC tokens, investing $500,000 to bolster USTC's value post-de-pegging in May 2022.
  • Terra Luna Classic community unanimously approves on-chain deployment of terrad client v2.3.1, addressing critical issues and showcasing rapid response.
  • Terra Classic saw a new all-time high of 589,000 transactions on Nov 22, indicating increased user activity and confidence. Staking ratio on Terra Classic rebounds above 15%, supporting decentralization and earning rewards.
  • USTC's surge positively influences LUNC, witnessing a 45% increase. LUNA also surged by 19%.
  • Binance to launch perpetual contracts for USTCUSDT on Nov 27, introducing new trading opportunities and speculation on USTC's future price movements.

Terra Classic (USTC) has experienced an unprecedented surge, with prices soaring by 300% within 24 hours. This surge, propelling USTC to $0.067, reflects a remarkable 298% gain over the past week. 

USTC 1-Day Price Chart (Source: CoinMarketCap)

This surge comes as a stark departure from the previous period of stagnation, leaving many curious about the factors driving such a rapid increase. Below we have stated potential reasons for the recent rise. In any case, the reasons listed here are not necessarily the reasons for the surge.

Strategic Acquisition by Terra Classic Labs

Terra Classic Labs has orchestrated a strategic move by acquiring 25.6 million USTC tokens, injecting approximately $500,000 into the market at an average price of $0.021 per token. 

This acquisition, aligned with the Treasury Reserve Policy, reportedly aims to fortify the value of USTC following its de-pegging from the $1 mark in May 2022. The investment is designed to enhance liquidity stability and create new investment opportunities, thereby increasing user holdings. 

Community-Driven Proposals Fueling Momentum

The Terra Luna Classic community has played a pivotal role in USTC's rally. A crucial proposal seeking community approval for the on-chain deployment of terrad client v2.3.1, has garnered unanimous support. This update addresses a critical issue related to the dyncomm ante decorator, specifically resolving the sequence mismatch problem affecting some validators during commission edits. 

Furthermore, the recent proposal to safely re-enable the market module and incrementally re-peg USTC to $1 also caught the eye of many.

Record-Breaking Transactions and Staking Surge

Recent data from the Terra Classic Foundation indicates a surge in network activity, with a new all-time high of 589,000 transactions recorded on November 22. Additionally, the staking ratio on Terra Classic has rebounded above 15%, signaling strong user confidence and support for decentralization. These metrics suggest a positive shift in user sentiment towards the project and indicate that the ecosystem is on track for recovery.

Over the past day, the asset's 24-hour trading volume increased by 1,350%, reaching $1.3 billion. 

Impacts on Terra Classic (LUNC) and LUNA

Given the close relationship between USTC and Terra Classic (LUNC), the surge in USTC's value has positively influenced LUNC, witnessing a 45% increase to $0.0001135. This reversal of previous losses hints at the potential for LUNC to explore new price levels, driven by the ongoing USTC rally. 

Meanwhile, LUNA has surged by 19% in the past 24 hours, trading at $0.83, with a market cap of $491 million, making it the 99th-largest cryptocurrency.

As per recent reports, Binance launched perpetual contracts for USTCUSDT on November 27 at 12:30 UTC. This development introduces a new dimension to USTC trading, allowing speculators to capitalize on price movements relative to USDS-M through leveraged trading.

Disclaimer

Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article

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