LUNA Price Surged Another 30%, But Is It Sustainable?
Following a long accumulation, the LUNA price surged significantly in the last two days. Moreover, the technical chart justifies this price action with a rounding bottom pattern in the daily time frame. This bullish reversal pattern should encourage buyers to extend the recovery above $9. However, is it safe to enter now?
Key points
- The rounding bottom pattern governs the LUNA price action
- The LUNA buyers currently struggle to surpass the $7.5 resistance
- The intraday trading volume in the LUNA coin is $5.7 Billion, indicating a 69.5% gain.
Source- Tradingview
For the past three months, the LUNA/USDT pair consolidated in a narrow range from $2.68 to $1.5. The multiple retests to the lower support indicate the traders are actively buying at this support, forming a high accumulation zone.
Furthermore, as the Terra community is planning for a resurgence, the Terra tokens are experiencing significant inflow. Thus, the LUNA price surged perpendicularly and marked a high at $7.65
Thus, the bull run registered a 212% growth in just two days. However, both the daily candles showed high-wick rejection near the $7.5 mark, suggesting strong profit booking at this level.
In addition, such sudden recovery in a short span is considered unhealthy for an assistant. Therefore, a minor consolidation or retracement is needed to stabilize the LUNA price.
Therefore, if the prices revert lower, the Fibonacci retracement level suggests that $5.3(0.382) and $4.53(0.5 FIB) may act as a significant footing that could continue the bull run. Thus, the coin chart reveals a rounding bottom pattern, and under its influence, the LUNA price should surge to the $9 neckline.
Conversely, if the LUNA price dips below $4.53 support, the bullish momentum will start to weaken gradually.
Technical Indicator
Relative strength index: the daily-RSI slope spiked into the 90% mark suggesting the traders have overextended their buying activity. Thus, the momentum indicator bolstered the correction theory mentioned above.
EMAs: the ongoing recovery breached the 20-and-50-day EMA in one strike. During the potential correction, these EMAs could assist buyers in resuming the bullish growth.
- Resistance levels- $6.2, and $7.5
- Support levels- $5.3 and $4.5
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