Terra (LUNA) susceptible to 50% drop if bearish head-and-shoulders sample performs out

Must read

USD/CAD More Gains Could Be Activated!

The USD/CAD pair rallied within the final three hours and now's traded at 1.2708 stage. In the brief time period, it has retested the...

Japanese Yen Slides Against the US Dollar and Euro. Will JPY Resume Weakening?

Japanese Yen, USD/JPY, US Dollar, EUR/JPY, Euro - Talking PointsUSD/JPY has bounced off the latest low, however resistance might lie forwardEUR/JPY seems to be...

FTX crypto change wins license in Dubai to open native headquarters

Major international cryptocurrency change FTX is increasing operations within the United Arab Emirates by receiving a digital asset license in Dubai.The license is outwardly...

Australian Dollar Technical Analysis: Failure at Significant Resistance

Australian Dollar Outlook:AUD/JPY charges have been rejected at symmetrical triangle resistance in addition to the ascending trendline from the March 2020 and August 2021...

Terra (LUNA) could fall to just about $25 per token within the coming weeks as a head-and-shoulders (H&S) setup develops, indicating a 50% worth drop, in accordance with technical evaluation shared by CRYPTOPIKK.

H&S patterns seem when the value varieties three peaks in a row, with the center peak (known as the “head”) greater than the opposite two (left and proper shoulders). All three peaks come to a high at a typical worth ground known as the “neckline.”

Traders sometimes look to open a brief place when the value breaks under the H&S neckline. However, some make use of a “two-day” rule the place they await the second breakout affirmation when the value retests the neckline from the draw back as resistance, earlier than getting into a brief place.

Meanwhile, the perfect quick goal for merchants comes out to be at size equal to the utmost distance between the pinnacle and the neckline. In LUNA’s case, the value has now been heading towards the identical H&S quick goal, at the moment close to $25, as proven within the chart under.

LUNA/USD each day worth chart. Source: TradingView

Meanwhile, the quantity recorded throughout the H&S breakout seems constant, underscoring that the continued downtrend has sufficient bearish sentiment. This raises dangers of additional declines within the Terra market.

LUNA’s each day momentum indicators, primarily the relative energy index (RSI) and the cash circulate index (MFI), have each entered their respective oversold areas, which some would possibly think about to be a purchase sign. CRYPTOPIKK acknowledged that they may immediate the LUNA worth to rebound however mentioned “the trend still seems [to be] heading down.”

Where’s the underside?

The bearish outlook seems as LUNA trades below the stress of sturdy macroeconomic catalysts, primarily the U.S. Federal Reserve’s resolution to unwind its $120 billion a month asset buying program totally by March, adopted by the primary rate of interest hike from its present near-zero ranges.

Tightening financial insurance policies had began hurting belongings that had been bullish when these insurance policies have been unfastened. That consists of some sections of the U.S. inventory market and Bitcoin (BTC). So, LUNA appears to have been tailing Bitcoin’s losses in opposition to the continued market uncertainty, particularly because it sits atop a year-over-year revenue of three,200% versus BTC’s 11.50% positive aspects.

Related: Defying the bear market, this automated technique is up 15% thus far in 2022

LUNA/USD weekly worth chart. Source: TradingView

In its quick historical past as a monetary asset, LUNA’s downtrends have sometimes come to exhaustion because it exams its 50-week easy transferring common (50-week SMA; the blue wave within the chart under) as help. That worth ground was close to $30 on the press time.

LUNA/USD each day worth chart. Source: TradingView

Meanwhile, on the each day timeframe chart, LUNA has been testing its 200-day exponential transferring common (200-day EMA) for a possible rebound. Should it occur, LUNA’s subsequent upside goal seems to be close to $75, as proven within the chart above.

Conversely, a decisive transfer under the 200-day EMA wave could set off the H&S setup towards $25.

The views and opinions expressed listed below are solely these of the writer and don’t essentially mirror the views of Cointelegraph.com. Every funding and buying and selling transfer includes threat, it is best to conduct your personal analysis when making a call.

More articles


Please enter your comment!
Please enter your name here

Latest article

Fireblocks Introduces ‘Off Exchange’ to Address Exchange Counterparty Risk, Integrates with Deribit

On November 28, 2023, Fireblocks, an modern digital asset operations platform, introduced the introduction of 'Off Exchange', a first-of-its-kind resolution aiming to revolutionize the...

Our knowledge reveals merchants at the moment are net-long USD/CAD for the primary time since Sep 29, 2023 when USD/CAD traded close to 1.36.

Number of merchants net-short has decreased by 19.21% from final week.SYMBOLTRADING BIASNET-LONG%NET-SHORT%CHANGE IN LONGSCHANGE IN SHORTSCHANGE IN OIUSD/CADBEARISH51.44%48.56%5.67% Daily46.95% Weekly-10.42% Daily-19.21% Weekly-2.80% Daily5.15% Weekly of...

Dash 2 Trade (D2T/USD) Maintains Stability at $0.0043, Positioning for Potential Bullish Price Movement

Amidst the noticed volatility within the Dash 2 Trade market, as mirrored within the higher and decrease shadows of candlesticks since November 23, a...