Key Takeaways:
- Terra (LUNA) gained 35% in value, approaching its all-time high and following Bitcoin’s recovery.
- The rally could be short-lived, based on technical indicators.
- Terra’s developmets contradicted the technicals.
YEREVAN (CoinChapter.com) – LUNA, the governance token of stablecoin issuance protocol Terra, traded at nearly $103.70 in Wednesday’s European session. It rebounded from strong support at approximately $77 on Mar. 8 and rallied over 35% in the previous 48 hours.
LUNA’s rally came in sync with Bitcoin’s (BTC) 12% recovery in the same period. However, it is not certain whether the digital asset can maintain the upward impulse, as the trading volumes on the daily chart did not follow the price action and declined in the previous 24 hours.
Also read: Terra prices ink 75% gains in February — more gains for LUNA ahead?
LUNA’s relative strength index (RSI) stood at 70, which hinted at lower chances for further price appreciation. In detail, the RSI is a momentum indicator that reflects the traders’ return expectations. When it hits 70, or higher, investors who rely on RSI could consider the token ‘overbought’ and book profits, triggering a correction.
Moreover, the four-hour chart analysis suggested a reversal ahead, based on several indicators.
Terra (LUNA) 4h chart
The four-hour chart analysis based on the Tom Demark (TD) Sequential indicator revealed that the upward impulse might be weakening as Terra’s token formed the 9th consecutive candle that closed higher than the close of the candle four four-hour-periods ago. Moreover, the price action exceeded the Bollinger Band margin, which could also support the reversal claim.
Additionally, the RSI on the low time frame chart above also crossed 70, and the trading volumes declined throughout the previous 24 hours.
Also read: Ethereum rallies 11% as Goldman Sachs give clients access to new ETH Fund.
Developments on Terra’s ecosystem backed the rally, as the platform flipped Ethereum in terms of total staked value. According to crypto data provider Staking Rewards, LUNA’s staked value stood at nearly $33 billion against Ether’s $26 billion.
Moreover, Anjan Vinod, the vice president of ParaFi Capital, announced the “onboarding” of UST to Aave, a borrowing/lending protocol, on Mar. 8. In detail, UST is Terra ecosystem’s main stablecoin, with a market cap of over $14 billion.
This proposal uses Wormhole’s UST. wUST will give Aave borrowers and lenders more stablecoin options and help create a more competitive market. Over time, we hope the Terra community considers LUNA incentives for UST borrowers and lenders on Aave.
said the executive.
