Can the $60M AVAX Buyback Ignite a Terra Luna Classic Price Rally?

Terra Luna Classic price has been trending upward since July, despite a market-wide crash on August 5. Recent developments in the Terraform Labs liquidation have led Avalanche (AVAX) to buy back $60 million worth of AVAX tokens held by the Luna Foundation Guard (LFG), originally used to support the UST stablecoin.

The AVAX price surged 17.5% on Tuesday following the news but has since cooled down and is now 0.7% down. Now, the LUNC community speculates if the funds could be used for a LUNC buyback and burn, potentially boosting its price further.

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 $0.0000886, down 0.6% 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 $506 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.