The TerraUSD token has been trading within a narrow range as members of the Terra Luna Community cast their votes to reclassify and rename it.
On Tuesday, the price of TerraUSD (USTC) was at $0.01266, reflecting a 45% decline from its peak this year. This decrease has resulted in a market capitalization of $70 million.
The Terra Luna Classic (LUNC) community is currently voting on a proposal that aims to change USTC’s classification from a stablecoin to either a Universal Standard Token or a meme coin.
This proposal underscores the reality that USTC is no longer behaving like a stablecoin, and the prospects of returning to its $1 peg appear slim. With USTC currently valued at $0.01260, it would need to increase by over 7,300% to achieve parity with the U.S. dollar.
The intent behind this vote is to protect exchange listings and navigate around regulatory challenges.
Binance, the largest supporter of LUNC, has indicated plans to delist USTC later this month, with other exchanges likely to follow suit. The rationale is that exchanges may continue to list USTC if it is no longer categorized as a stablecoin.
Reclassifying USTC would also exempt it from regulations pertaining to stablecoins, making compliance easier.
The proposal includes a name change for USTC from TerraUSD to Universal Standard Token Classic, while keeping the ticker symbol USTC intact.
TerraUSD emerged from the 2022 downfall of Terra, which resulted in a staggering loss of $40 billion. Originally, TerraUST, or UST, was an algorithmic stablecoin intended to maintain its $1 peg by balancing supply and demand through arbitrage, in addition to having a mint-and-burn relationship with Luna.
Technical Analysis of USTC Price
Earlier this year, USTC’s price plummeted, reaching a low of $0.0085 before slightly rebounding to the current price of $0.0125, just beneath a critical resistance level of $0.01387. This level is significant as it marked the lowest swing during April, July, and August of the previous year.
The price of USTC has formed a minor double-bottom pattern around $0.010, with the neckline situated at $0.02193, the peak of this month. A double-bottom is regarded as a promising bullish reversal signal in the market.
Consequently, USTC could potentially rebound and test the crucial resistance at $0.03140, its highest level for 2024, which is approximately 145% above the current price. However, if it dips below the support at $0.0085, the positive outlook would be negated.