Disclaimer: The findings of this analysis are the only opinions of the writer and should not be considered investment advice
Over the past few hours, Bitcoin and many altcoins have posted strong gains, with LUNA being one of the strongest performers. Bitcoin’s move above $39k has revived the bulls in the near term. Tether’s dominance in the market has declined over the same period, with the same underlined capital being deployed on the sidelines.
Does this represent a longer-term trend change for the market? Maybe not. However, times are definitely strongly bullish for Terra.
LUNA-1 hour chart
Source: LUNA/USDT on TradingView
In early March, LUNA ranged after a relentless rise from $52 to $93 the week before. This range was broken within a few days, suggesting that it was a short-term rectangular top pattern. This brought LUNA back to the $76 support area.
The price has formed a bearish broadening wedge pattern (white) in recent days. It has also broken out in the last 24 days. This outbreak was explosive and was driven by strong demand.
The USD 84 level was flipped to support, and at the time of writing, LUNA is also trading above the USD 94 level. Gains from recent hours could have pushed uncollected liquidity down. And a return visit to the $88-$90 region can’t be ruled out either.
rode
Source: LUNA/USDT on TradingView
The indicators have shown strong bullish momentum after the recent gains. The RSI was in overbought territory on the hourly chart, while the MACD was also well above the zero line. An overbought RSI by itself does not indicate a pullback is imminent.
The most interesting indicator was the OBV as the end of the downtrend on the price charts was seen quite clearly on the same with a spike to the north. This suggested that the $76 rally was the result of heavy buying pressure.
Conclusion
In the coming hours, LUNA could break above $100 and $103. On the downside, a short-term buyer of this asset would be looking for a bearish divergence and pullback towards $88-$92.
Visiting this area again would be a buying opportunity. Beyond the ATH, LUNA could target $110 in the coming days, based on Fibonacci extension levels not shown here.