Terra Luna Classic (LUNC) Community Votes to Reclassify TerraUSD (USTC)

TerraUSD token remained in a tight range as the Terra Luna Community members voted to reclassify it and change its name.

TerraUSD (USTC) token remained in a tight range on Tuesday as members of the Terra Luna Community voted on a proposal to reclassify and rename the token.

TerraUSD price was trading at $0.01266 by 09:35 ET (13:35 GMT). The token’s value decreased by 45% from its highest level this year, cutting its market cap to $70 million.

The community was voting on a proposal that aimed to reclassify USTC from a stablecoin into a Universal Standard Token or a meme coin.

This proposal came after the community realized that USTC would likely not function as a stablecoin and that the chances of it being able to recover to the $1 peg were slim. As USTC was trading at $0.01260, it would need to increase by over 7,300% to reach parity with the U.S. dollar.

The goal of this vote was to help preserve exchange listings and bypass regulatory measures. Binance, the biggest supporter of LUNC, had already announced plans to delist USTC later this month, and other exchanges could follow suit.

The argument was that exchanges could continue listing USTC if it was no longer classified as a stablecoin. Reclassifying it would also exempt it from stablecoin-related regulations, simplifying compliance.

The proposal also aimed to change USTC’s name from TerraUSD to Universal Standard Token Classic, while keeping the ticker symbol USTC.

TerraUSD emerged from the collapse of Terra in 2022, which led to a $40 billion loss. The original TerraUST or UST was an algorithmic stablecoin that sought to maintain the $1 peg. It did that by relying on a balance of supply and demand managed by arbitrage. It also had a mint-and-burn relationship with Luna.

Terra Luna Classic price technical analysis

USTC’s price crashed and bottomed at $0.0085 earlier this year. It then rose slightly to the current $0.0125, just below the key resistance at $0.01387. This level was important as it marked the lowest swing in April, July, and August last year.

The cryptocurrency price also formed a small double-bottom pattern at $0.010 whose neckline was at $0.02193, its highest level this month. A double-bottom is one of the most bullish reversal signs in the market.

Therefore, it could bounce back and retest the key resistance at $0.03140, its highest level in 2024, which is about 145% above the current price. But a drop below the support at $0.0085 would invalidate the bullish outlook.