Terra Price Pauses at ATH: Time for LUNA Longs to take Profits?

Summary:

The Terra price has gained almost 40% in the last week as the LUNA token closes in on the November record, but can it continue?

The Terra price has gained almost 40% in the last week as the LUNA token closes in on the November record, but can it continue?

Terra (LUNA) is unchanged in early trading on Tuesday as the cryptocurrency market stalls following Monday’s impressive comeback. The LUNA token is trading at $52.12 (+0.88%), a 7-day gain of +26.0%, leaving it just 8% shy of the $56.40 all-time high. Furthermore, Terra’s market cap is back above $20 billion, cementing its place as the 13th most-valuable crypto behind Avalanche.

The cryptocurrency market has roared back to life this week as investors rush back into risk assets. In the last 48-hours, fears over the Omicron covid variant have cooled, although prices remain below last week’s top in most cases. However, LUNA is an exception gaining almost $17 from Friday’s low. Despite the constructive price action, I am concerned that Terra has bounced back too quickly, which may encourage profit-taking.

LUNA Token Price Forecast

The daily chart shows the Terra price is running into resistance as it approaches $56.40. Notably, after setting a new record on the 8th, LUNA reversed over 30% before finding support.

Furthermore, rising trend line resistance at $58.00 adds to the significant obstacles on the upside. On that basis, we may be close to a near-term top. In my opinion, LUNA could pull back towards $42.00 in the coming sessions, creating a better entry point.

However, a close above trend resistance could encourage momentum chasing buyers to push the price even higher. Subsequently, a close above $58.00 invalidates my bearish thesis.