Terra’s Mirror Protocol MIR bounces 40% back to record low two days after crash

Mirror Protocol, a decentralized financial (DeFi) protocol built on the Terra blockchain, was hit by one of the biggest collapses in financial history this week after Vladimir Putin ordered military strikes on Ukraine.

Terra tokens rally

Mirror Protocol’s native token, MIR, fell to $0.993 on Feb. 24, its worst level yet amid a sell-off in the broader crypto market. But a sharp rally followed, taking the price to $1.41 two days later, up more than 40% from MIR’s record low.

MIR/USD four hour price chart. Source: TradingView

Like the decline, MIR’s upward retracement came in the wake of similar recoveries elsewhere in the crypto market. But interestingly enough, MIR/USD returns seemed larger than some of the highly valued digital assets, including Bitcoin (BTC) and Ether (ETH).

Notably, Bitcoin rose to 17% after hitting a low locally on Feb. 24, below USD 34,500. By contrast, Ether’s gains stood at just over 25% over the same period after jumping from $2,300.

On the other hand, Terra (LUNA), whose protocol houses the Mirror Protocol synthetic asset platform, recovered by more than 50% during the same period.

Interestingly, another Terra blockchain-backed token, Anchor Protocol (ANC), is up more than 45% from its February 24 low of $2.64, reaching its best level yet, just below $4.

MIR paints a “golden cross” but…

The recent upward boom in the Mirror Protocol market also resulted in the formation of a so-called golden cross pattern.

In detail, MIR’s 20-4H exponential moving average (20-4H EMA; the green wave) rose above its 50-4H EMA (the red wave), a move that typically follows a short-term uptrend, according to the Mirror Recent Market History of Protocol.

Nevertheless, readings from the MIR’s four-hour relative strength index (RSI) — which went above 70 over the weekend — warned of its “overbought” status. That coincided with a correction in the Mirror Protocol market, with MIR now down more than 10.5% from its retracement high near $1.41.

MIR/USD four hour price chart with golden cross and Fibonacci retracement levels. Source: TradingView

The decline caused MIR to fall below $1.36, one of the earlier support levels that also converges with the 61.8 Fib line of a Fibonacci Retracement chart made from $1.58-swing high to $1.00- swing low.

The price is now seeing additional declines towards the next support levels near the 0.5 Fib line around $1.29, followed by the 0.236 Fib line at $1.13.

Related: Coin-Crypto Consulting: A Look at Terra .’s Ecosystem

Conversely, if MIR remains above the 20-4H and 50-4H EMAs, the chances of a $1.58 retest may increase. The optimistic outlook also depends on how the ongoing geopolitical conflict in Eastern Europe develops and its impact on Bitcoin.

MIR/USD four hour price chart with correlation between Bitcoin and Mirror Protocol. Source: TradingView

Notably, the correlation coefficient between Bitcoin and Mirror Protocol is near 0.75 above zero, which means that the MIR price more or less reflects the movements of the best digital asset for now.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Coin-Crypto.com. Every investment and trading move involves risks, you should do your own research when making a decision.

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