The Terra price reached a new ATH over the weekend despite Bitcoin crashing to $41,000 but can the LUNA token hold on to the gains?
Over the last week, Terra (LUNA) has been the best-performing cryptocurrency in the top-100 list. While most cryptos have suffered losses to various degrees, even after retracing 20% from Saturday’s peak, the LUNA token is up 30% in the last seven days compared to Bitcoins 12% drop. As a result, the stablecoins blockchain’s market cap has jumped to $25.8 billion, ranking it the 10th most-valuable cryptocurrency behind Polkadot.
The main reason the LUNA token is bucking the trend is Terra’s growth in Decentralized Finance (DeFi). Over the last week, Terra has grown its Total Value Locked (TVL) by 22% to $13.42 billion and overtaken Solana to become the third-largest DeFi blockchain behind Ethereum and BSC.
The daily chart highlights the extreme price volatility over the weekend. The LUNA token had a 45% trading range from peak to trough on Saturday. Remarkably, Terra set a record closing price of $75.27 while BTC suffered a historic collapse.
Notably, the surge lifted LUNA above the long-term trend resistance at $60.00, which is now the first significant support level. In my view, as long as the Terra price holds above $60.00, it should continue to do well. However, a close below trend could encourage profit-taking. In that event, an extension to Saturday’s $46.40 low looks likely.
The immediate prospects are constructive above $60.00. And therefore, the view is cautiously optimistic. However, crypto market volatility may return this week, and therefore traders should expect wild price swings.
For more market insights, follow Elliott on Twitter.
This post was last modified on Dec 07, 2021, 01:48 GMT 01:48