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Altcoins including Terra Classic rallied the most backed by the hype that followed the approval of spot Bitcoin exchange-traded funds (ETFs) for the first time in the US. While Bitcoin also rose touching $49,000 at one point, its reaction to the news was more or less lethargic.
This lack of momentum in Bitcoin price continues to hurt the market, especially altcoins.
Although Terra Classic climbed back to early January levels at $0.0001374, it lacked the momentum to keep the uptrend sustained. Instead, the token has retraced to trade at $0.0001297 and tested a very important bullish pattern support.
Terra Classic Price on the Threshold of 30% Move
The rise to $0.0001374 can be attributed to a commendable breakout from a recently formed inverse head and shoulders pattern. This bullish pattern often forms toward the end of a correction, signaling a potential trend change.
Trading patterns can be extremely challenging for new traders but also experienced investors. Therefore knowing when to enter a long or short position is the secret to staying profitable. Technical indicators often come in handy to help guide trading decisions.
The importance of an inverse head and shoulders starts to materialize after the asset breaks above the neckline resistance. In Terra Classic’s case, this hurdle lies at $0.000129.
Long positions will be entered above the neckline, anticipating a breakout equal to the height of the pattern — 30% for LUNC as shown on the chart. Increasing trading volumes help to sustain the breakout, due to resistance at the 200 Exponential Moving Average (EMA) (in purple) at $0.0001374.
Terra Classic (LUNC) bulls received a boost on January 8 when the Moving Average Convergence Divergence (MACD) indicator flashed a buy signal. This technical cue reinforces the positive sentiment surrounding the token. Adding to the bullish case, a potential moving average crossover on the four-hour chart could further fuel optimism. As of now, the blue 20 EMA line is approaching a close above the red 50 EMA, painting a promising picture for LUNC in the coming days.
Despite the retracement from the weekly high, opportunities in LUNC are in plenty. For this reason, traders should be alert for a potential rebound from the neckline. This would serve as confirmation for the uptrend and an eventual breakout first to $0.00016 (triangle target) and above $0.0002 over the coming weeks.
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