Terra Classic USD (USTC) has gained 48.8% over the last 24 hours. The stablecoin was trading at $0.0428 at the time of writing. The gains made by USTC have led to speculations on whether the token will reclaim its $1 peg.
USTC gains 48% to $0.0428
USTC lost its peg in May after the debacle with the Terra blockchain. In June, USTC dropped to an all-time low of $0.00601. However, it has gained nearly 600% since hitting these lows and could be set to erase one more zero.
The current uptrend has investors anxious about whether USTC will reclaim the $1 peg. Unlike stablecoins like Tether (USDT) and USD Coin (USDC), whose price is guaranteed by underlying assets that act as reserves, USTC is an algorithmic stablecoin.
USTC lost its peg in May. As a result, trillions of Luna Classic (LUNC) tokens were minted to restore the peg unsuccessfully. This caused the LUNC token to plunge to notable lows. LUNC, once a top-ten cry0ptocurrency, lost its value to below $1, sinking billions of dollars in investor money.
Over the last 24 hours, USTC has traded between the $0.0287 and $0.0427 levels, indicating increased volatility in the stablecoin. USTC’s trading volumes over the last 24 hours stand at over $134 million.
USTC is down by around 90% from its $1 peg. To reclaim this peg, the token must receive overwhelming buyer support. USTC should always be valued at $1 because stablecoins are not supposed to be as volatile as the rest of the cryptocurrency market.
The USTC stablecoin reached the highest price value since the collapse towards the end of June. At the time, the stablecoin gained to around $0.099, and at the time, the LUNC community anticipated that $1 would be reclaimed to no avail.
USTC’s chart above shows intense volatility during the intraday-trading hours. While the past few hours show that a trend reversal is possible, there is the possibility that USTC will still test the next resistance at $0.099, after which a rally to $1 could be ignited.
Because of USTC’s volatility, the token can no longer serve as a stablecoin. USTC could only achieve its stablecoin status if it can rally to $1 and maintain such levels. Additionally, because of USTC’s interdependence with Luna Classic (LUNC), the token’s price movement will depend upon how LUNC performs.
Developments surrounding USTC
Before USTC’s recent rally, LUNC was also on a notable bull run, as seen in the token’s 57% gain over the last two weeks. The uptrend, now cooling down, was triggered by the 1.2% tax burn implemented by the Binance exchange.
Suppose LUNC can manage to burn more tokens. In that case, the asset price could start recovering, and a bullish sentiment could restore confidence in the Terra Luna ecosystem, triggering USTC to reclaim its peg.
USTC is a volatile asset, and the current price trend could fail to be sustained for long. Therefore, if you want to diversify your portfolio, you could consider ESG-friendly crypto such as IMPT. IMPT is a new cryptocurrency whose presale is currently ongoing. This presale has raised more than $2.5 billion and has a hard cap of $10.8 million.
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