After outpacing Bitcoin, can LUNC sustain its latest price rally?

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.