Although bounce looks bullish, Terra Classic still in bear trend
|- Terra Classic has seen support coming in at a technical level.
- LUNC price action looks to be underpinned for now.
- Although the recovery looks staggering, the weekly close will be at a loss, and no signal points to the bear trend being broken for now.
Terra Classic (LUNC) staged a staggering recovery on Thursday by clawing back several percentages of the incurred losses earlier this week. Help came from US equities and the bond market that saw bids across the board and created a buying momentum in a week where fire sales mostly dominated it. Although that recovery is promising, the overall bearish forces are still present and doing their work in full force.
LUNC price stuck in a bearish triangle on the weekly chart
Terra Classic, zooming out on the time frame to a weekly chart, is executing a perfect textbook technical bounce. The level at hand that gives support is around $0.000016501, which was the cap in the last week of June and only broke at the end of August. A very important pivotal level that helped catch the falling knife after the big blow from FTX’s debacle.
LUNC price action though is still very much in a downtrend. With fresh weekly lows for this week, it becomes clear that the red descending trend line is still dictating price action and is letting bulls have their fun within the range of the triangle’s base and its slope. Expect to see pressure mount in the coming weeks on that same $0.000016501 level and see a break lower with $0.000010000 at risk.
LUNC/USD weekly chart
To the upside, the only real bullish element worth pursuing is a breakout trade. That would mean that the red descending trend line would be broken, preferably with a weekly close above it. That signal would point to a change in trend and sentiment, and could see Terra Classic rally toward $0.000033219 in the last weeks of 2022.
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