Terra presents buying opportunity before LUNA hits $70

LUNA price develops bear trap on its Point and Figure chart, indicating a bullish reversal could be coming soon.
Breakout of a tight trading range could reverse prior losses.
Downside risks remain but are likely limited.

LUNA price has performed admirably over the past two weeks, especially compared to the losses the broader cryptocurrency market has suffered lately. Terra has been stuck in a range for almost the entire month of February thus far – but a bullish breakout may be imminent.

LUNA price positioned for a retest of $70, bulls look to take over

LUNA price action of late has been extremely bearish. Since the Wormhole incident, buyers have been reticent about returning to Terra – but that could change very quickly. As a result, LUNA could probably lead altcoins again and continue the bullish expansion phase before its massive selloff.

The hypothetical long entry for LUNA price is a buy stop order at $62, a stop loss at $53, and a profit target at $92. The trade represents a 3.33:1 reward for the risk setup with an implied profit target of over 50% post entry. However, several price levels will prevent a single run-up to the target at $92.

LUNA/USDT $2.00/3-box Reversal Point and Figure Chart

The first price zone of resistance is the current bear market trend line, currently at $68. If LUNA hits $68, then it will convert into a bull market, but a pullback should be expected if that occurs. The second and most likely resistance zone is the bottom of the Ichimoku Cloud (Senkou Span A, not shown) at $70. Again, selling pressure there is projected to be significant.

The long entry is based on a Bear Trap pattern in Point and Figure Analysis. The pattern requires one O to drop below a double-bottom, with the next reversal column of Xs triggering a bullish entry. If confirmed, a likely short squeeze of LUNA price will begin. But downside risks do remain.

If LUNA price dropped to $6, that would complete a Descending Triple-Bottom pattern. While not shown, the projected profit target on that theoretical short scenario is near the $32 value area.

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