Terra Classic Price Dips Below $0.0001, Was the Recent Recovery a Bull Trap?

On November 27th, the Terra Classic price underwent a significant reversal, sharply dropping from the $0.000129 level. This downturn resulted in a 27% decrease within a span of two days, now resting at $0.000934. Notably, this correction formed a bullish reversal pattern within the 4-hour timeframe chart, signaling a potential risk of further decline in the LUNC price.

Also Read: Luna Classic (LUNC) Price Soared As Binance Launches USTC Perpetual Contract

Will Terra Classic Price Drop Below $0.00008?

• The LUNC price shows the formation of a bearish reversal candle pattern called an evening star in the daily time frame chart.
• A possible drop below the 61.8 Fib level at the $0.0083 mark would trigger a significant correction
• The intraday trading volume in the LUNC coin is $353 Million, indicating a 43% loss.

Source- Tradingview 

During the third week of November, the Terra Classic price observed a robust recovery, surging from $0.000069 to a high of $0.000129, marking an impressive 86.82% growth. This bullish rally stemmed from a combination of technical and fundamental factors. 

A bullish breakout from the pennant pattern, as Coingape highlighted in a previous article, contributed to this rally, coinciding with a massive surge in USTC Stablecoin following Terra Classic Labs’ strategic investment move. 

However, despite this news-driven surge, this altcoin struggled to sustain the higher prices and with a 6.5% intraday loss, the prices dipped below the psychological threshold of $0.0001. Examining the 4-hour timeframe chart reveals the LUNC price breaks below the neckline support of the bullish reversal pattern known as the Head and Shoulders. 

Presently, the LUNC price trades at $0.000097, and should it persist below this neckline support, increased market supply pressure may lead to further acceleration in correction, potentially reaching $0.0585 and marking a 38% loss.

Key Levels to Watch

The ongoing correction in Terra Classic price has dipped to the 50% Fibonacci retracement level, considered healthy within a long-term bullish trend. Analyzing the current recovery trend suggests that a retracement between 50% to 61.8% in LUNC coin is favorable before any subsequent upward movement. As a result, coin holders should monitor the crucial 61.8 FIB level at $0.0083, as it could serve as a pivotal support, encouraging buyers for a strong rebound and preventing further decline.

• Exponential Moving Average: The slope of the 20-day EMA provides added support to buyers during the ongoing corrections.
• Relative Strength Index: A potential drop in the daily RSI slope below the 50% midline would signify a weakening in bullish momentum.