Terra up against stiff resistance, LUNA downside risks remain significant

LUNA price recovery from Wormhole debacle continues.
Terra faces a bullish breakout setup, but a conservative approach is necessary to reduce risk.
Downside risks are substantial and point a deep dive south if sellers resume control

Jonathan Morgan Independent Analyst

LUNA price has experienced the same bullish momentum the broader cryptocurrency market is benefiting from. However, LUNA has recent bearish fundamentals weighing on its future price action.

LUNA price may terminate the current uptrend and return to a bearish trend

LUNA price faces a bearish continuation beyond the 38.2% Fibonacci retracement at $51 to test the 50% Fibonacci retracement at $41. Rejection against the daily Kijun-Sen at $57 is the most significant contributor to the probability of another leg lower for LUNA. However, bears will need to push two more critical support zones below to regain control.

Immediate support for LUNA price is against the Tenkan-Sen at $54, followed by the 38.2% Fibonacci retracement at $51. In particular, the 38.2% Fibonacci retracement should at least give bears some pause. In addition, there is a high volume node in the Volume Profile at $51, and the psychologically important $50 level is in that same value area.

The oscillators support some further downside pressure. The Relative Strength Index remains in bear market conditions and is close to the first overbought level in a bear market, 55. At the same time, hidden bearish divergence is forming on the Optex Bands oscillator and the Relative Strength Index. All are warning signs that a continuation move south is increasingly likely.

LUNA/USDT Daily Ichimoku Kinko Hyo Chart

If bulls want to invalidate any current bearish sentiment, they’ll need to first achieve a daily close of LUNA price above the Kijun-Sen. If that is achieved, bulls should have a relatively easy time pushing LUNA towards the next primary resistance level near the bottom of the Ichimoku Cloud (Senkou Span A) at $70.

Author

Jonathan Morgan

Independent Analyst

Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.

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