Terra’s LUNA token is trading in overbought territory following a sustained rally.
Several technical indicators suggest that a correction is near.
A spike in selling pressure could see this cryptocurrency drop to $11.00.
Share this article
Terra’s native token, LUNA, has stolen the crypto spotlight after gaining over 10 points in market value within 17 days. Now, the technicals forecast that a spike in profit-taking is imminent.
Terra Primed to Retrace
Terra could be due for a correction.
LUNA has lived up to its name as it has been mooning over the last three weeks. The twenty-third-largest cryptocurrency by market cap has surged by nearly 180% since Jul. 20, going from a low of $5.60 to a high of $15.50.
Although Terra may have room for another leg up, it is currently trading in overbought territory. The Relative Strength Index or RSI is hovering at a value of 82.20 on the daily chart, which is something to be concerned about.
Every time LUNA’s daily RSI has moved past the 80 mark since mid-February 2020, a steep correction followed.
The Tom DeMark (TD) Sequential indicator adds credence to the bearish thesis. This technical index is about to present a sell signal in the form of green nine candlesticks within the same time frame.
Although the bearish formation is yet to form, the near-term future does not look good for the bulls.
A glimpse at Terra’s daily chart reveals that the TD setup has been incredibly accurate at anticipating local tops on LUNA’s trend. The five sell signals that this indicator has presented since the beginning of the year were all validated, resulting in significant retracements.
Therefore, the pessimistic scenario must be considered despite the significant buying pressure seen behind LUNA.
The Fibonacci retracement indicator (measured from the March 21 high of $22.40 to the May 23 low of $3.90) suggests that a spike in profit-taking around the current price levels could see Terra dive towards $11.00. Failing to hold around this crucial support level may lead to a steeper correction to $7.90.
It is worth noting that as the TD’s sell signal has not been formed yet, LUNA may advance further before the retracement materializes. A clear break of the 38.20% Fibonacci retracement level at $15.30 would signal a partial continuation of the uptrend to the 23.60% Fibonacci retracement level at $18.00.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
DeFi Protocol Anchor Launches on Terra, Token Moons 66X
Anchor is a DeFi protocol on the Terra blockchain that allows users to borrow or save their stablecoins and Proof-of-Stake assets. Terra Ecosystem Grows Terra is a blockchain that focuses…
Terra and Harmony Announce Tight Full-Stack Partnership Focused on Use…
Terra and Harmony have announced a full-stack partnership. Terra and Harmony Link Up True to our cross-chain and interoperability vision, today we’re announcing a deep integration and partnership with Terra,…
How to Trade Using the Inverse Head and Shoulders Pattern
In stock or cryptocurrency trading, you may have heard of the term “inverse head and shoulders.” Also known as the “head and shoulders bottom” formation, the inverse head and shoulders chart pattern can…
Terra Virtua, Hashmasks Create Joint NFT Collection
Terra Virtua and Hashmasks link up for a special “rolling royalties” release. NFT Mainstays Unveil Joint Series Terra Virtua, the digital collectibles platform that leverages Augmented Reality, has joined forces…