Terra makes the crypto top 10, as LUNA soars 11% amid market correction

Terra LUNA
image from medium.com

Key Takaways:

  • Stablecoin issuance platform Terra advaced 20% in a week.
  • Its native token LUNA flashed conflicting technicals on daily and our-hour charts.

YEREVAN (CoinChapter.com) – While the rest of the crypto market struggled with red candles, Terra’s LUNA packed 75% since Nov 27 and peaked at a new all-time high of $78.10 on Dec 4. After the peak, the price action has been choppy. However, the digital asset gained 11% in the previous 24 hours and briefly ranked #9 with a $3 billion market cap.

The stablecoin platform outperformed Shiba Inu, Dogecoin, and Polkadot on its way to the all-time high. However, technicals indicate a downtrend ahead for LUNA.

LUNA daily chart

The digital asset formed an Ascending Channel on the daily chart, which consists of two parallel trendlines. They envelop the price action and constrain the swing. The Channel began in mid-August and has been instrumental in determining LUNA’s bias ever since.

Terra (LUNA) in an Ascending Channel. Source: LUNAUSD on TradingView.com
Terra (LUNA) in an Ascending Channel. Source: LUNAUSD on TradingView.com
Also read: Terra Luna shoots over 73% in seven days, moves above Shiba Inu, Avalanche

Terra’s governance token retested the Channel’s resistance on Dec 4 and is likely to decline another 30% to retest the support at approximately $50.0. If the token follows the pattern, it will gain bullish momentum again in Q1 2022.

The relative strength index (RSI; purple graph at the bottom) looked confident and charted at 65. In hindsight, RSI is a momentum indicator that reflects the traders’ confidence level in the asset. When the momentum indicator stands between 50 and 70, it signifies high return expectations.

However, a more detailed four-hour chart flashed a bullish Ascending Triangle. The Triangle features a horizontal resistance line at $76.2 and ascending support that assisted the token since the all-time high. The token retested the resistance on multiple occasions in the previous days and looked like it could break out in the upcoming session.

Terra (LUNA) in an ascending triangle. Source: LUNAUSD on TradingView.com
Terra (LUNA) in an ascending triangle. Source: LUNAUSD on TradingView.com
Also read: LUNA leaps 21% in a week as Grayscale considers adding Terra to its investment products

As of publication, Terra’s future vector is not entirely clear. However, if the Triangle setup dominates, it could take LUNA above the Channel’s resistance and out of the formation altogether. In the Thursday session, the LUNA/USD exchange rate stood at $71.7.

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