Terra Luna Classic [LUNC] has been in the news lately after ranking among the market’s top gainers. In fact, the crypto posted double-digit gains over the last 24 hours, even as Bitcoin [BTC] and other cryptocurrencies bled notably.
LUNC’s strength isn’t new though. On 14th of June, AMBCrypto reported how the altcoin staged a run that hit 34%, while the broader altcoin market stayed subdued with gains of just 6%.
Its latest rally has now raised the question of whether LUNC can hold its gains, even with both volume and price climbing. This is a combination that typically points to a sustained bullish market.
LUNC fundamentals flash a clear retail warning
The altcoin seemed to be carrying a clear fundamental warning, particularly in how retail investors have been treating it. Consider this – Google Search Trends, a key proxy for gauging retail search interest in an asset, has plummeted notably.
At press time, the Google Search Trends reading had dropped to roughly 21 – Its lowest since LUNC set a high in early May. This was when interest climbed as high as 95 on the charts.
Search Trends gauge retail sentiment, where higher search points to curiosity and a tendency for this group to rotate capital into the asset. On the contrary, lower search hints at the opposite.
That’s not all as Community Sentiment, a tool where investors mark their outlook by voting bullish or bearish, revealed that interest has since dropped too. In fact, the share of bullish investors slipped by roughly 5% to just 73%.
A decline across both sentiment gauges raises the chances that the price could follow suit and slide lower in the near term.
LUNC capital base shrinks across spot and perpetual venues
The spot and perpetual venues for LUNC also flashed a clear signal, with capital outflows on both sides of the market emerging as a key concern.
At the time of writing, the spot market chart revealed striking capital leaving the asset – A sign that investors may be stepping out.
This has held as a pattern for the past three days, even before the asset staged any notable rally, with roughly $260,000 in netflows. In fact, LUNC recorded roughly $620,000 in outflows over the last 24 hours alone.
The perpetual market seemed to tell us a similar story as capital shrunk across the board. Shrinking capital means traders are less willing to take on risk, betting the asset may be sitting in a highly volatile phase and steering clear of liquidations.
The pull-back appeared to run even deeper in the perpetual market, where outflows dropped across the last 24 hours, three days, seven days and 10 days, peaking at $2.05 million.
Shrinking perpetual capital, paired with investors cashing out of the spot market, leaves the asset without a sufficient base to push to the upside. This could put the ongoing rally at risk of a decline in the short to near term.
Final Summary
- LUNC climbed by double digits while most of the market slipped, but the interest behind the move may be fading fast.
- Money has been leaving LUNC on both sides of the market, a sign that traders may be quietly cashing out.
