The LUNA price action is highly constructive, indicating a push higher is approaching, but will it deliver the anticipated $100 milestone?
Terra (LUNA) has recouped most of last week’s loss and is on track for a fourth positive trading day. LUNA is slightly firmer at $65.05(+1.3%), increasing 26% from Monday’s pre-FOMC lows. The bounce has lifted the stable-coin protocols market cap back above $24 billion, ranking it just below Avalanche as the 11th most-valuable cryptocurrency.
Terra has vastly outperformed the broader cryptocurrency market in the second half of 2021. The LUNA coin has been in a strong uptrend for six months. By December 4th, the price had gained a remarkable 2000% from May’s flash crash lows. However, recent market jitters and concerns about central bank tightening caused a 40% sell-off from the all-time high. But similar to previous corrections, buyers were quick to take advantage of the discount. As a result, the LUNA price is back in bull mode. The question is, can Terra maintain the rally in the current climate?
The daily chart shows that the LUNA price is trending higher in a broadening wedge pattern, a megaphone. If the coin continues to trade within the parameters of the pattern, a $100 price is possible at some stage. However, the pattern tells us that volatility increases as the price increases. On that basis, a test of trend support is also likely.
Below the market, the 50-DMA at $52.99 has proven to be a significant support level. The 100-DMA at 45.71 and the rising trend at $41.50 add to the confluent support. In my view, the overall market is intact as long as LUNA remains above the trend.
However, the technical outlook deteriorates if LUNA falls below trend support. Therefore, a daily close below $41.50 invalidates the immediate bullish outlook.
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This post was last modified on %s = human-readable time difference 03:34