USTC price wavers as LUNC community votes to make it a meme coin

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

TerraUSD (USTC) price was trading at $0.01266 on Tuesday, down by 45% from its highest level this year. This retreat has brought its market cap to $70 million. 

The Terra Luna Classic (LUNC) community is voting on a proposal that seeks to reclassify USTC from a stablecoin into a Universal Standard Token or a meme coin.

This proposal reflects the reality that USTC no longer functions as a stablecoin, and the chances of it regaining its $1 peg are slim. With USTC trading at $0.01260, it would need to rise by over 7,300% to reach parity with the U.S. dollar.

The goal of this vote is to preserve exchange listings and bypass regulatory restrictions.

Binance, the biggest supporter of LUNC, has already announced plans to delist USTC later this month, and other exchanges may follow. The argument is that exchanges could continue listing USTC if it’s no longer classified as a stablecoin.

Reclassifying USTC would also exempt it from stablecoin-related regulations, simplifying compliance.

The proposal also seeks to change USTC’s name from TerraUSD to Universal Standard Token Classic, while retaining 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 aimed to preserve 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. 

USTC 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 significant as it marked the lowest swing in April, July, and August last year.

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

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