LUNA’s price shows an interesting stance after the recent Bitcoin-induced pullback on March 31. The price action that has developed over the course of the past month suggests that a huge run-up is just around the corner.
An explosive rally awaits LUNA
The price of LUNA has recorded three higher highs and three higher lows since Feb. 28. Connecting these swing points using two trendlines reveals a rising wedge. This technical formation is a bearish setup, it predicts a 20% downswing to $78.91. And it is determined by adding the distance between the first swing high and swing low to the breakout point.
While this view is plausible, something completely opposite can also occur. Investors should expect the price of LUNA to break the upper trendline and continue to move north. Although theoretically the pattern should break out lower. However, in an extremely bullish market, rising wedges can break the upside effect.
Using the Fibonacci Expansion Tool, market participants can predict the chances of a new all-time high. On March 29, Terra Bulls pushed through the previous high and established a brand new high at $110.
Therefore, a rise in buying pressure that breaks the rising wedge upward is likely to shatter the current ATH at $110 and make its way into a new one. Based on the Fibonacci extension tool, the 161.8% extension could be at $149 or about $150 where the LUNA price forms a local top.
While the technical outlook can sometimes be unnecessarily skewed to favor one side, the on-chain stats help balance such biases. Well, the on-chain volume for Terra has increased from 2.41 billion to 4.19 in less than four days.
The nearly 50% increase in on-chain activity suggests investors are interested in LUNA at current price levels. This outlines a bullish outlook for the price of LUNA, adding further credibility to the views expressed from a technical standpoint.
Regardless of the bullish outlook, the price of LUNA could in some cases return to the daily demand zone, from $71.18 to $78.91 before moving higher. This move, which is bearish in the short term, could allow sideline buyers to get a discount on their purchase and also yield much higher returns.
However, a daily candlestick that closes below USD 71.18 will invalidate the bullish thesis for LUNA and cause a further decline towards stable support levels.