Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
After picking himself up from the golden Fibonacci level, Terra (LUNA) grew in an up-channel while making unbridled gains.
Going forward, any close below trendline support (white) would support LUNA for a 23.6% Fibonacci support retest. After this, the alt would likely enter a volatile phase as the tight phase fades. As of going to press, LUNA was trading at $85.16.
LUNA 4 Hour Chart
Since the ATH on December 27, LUNA fell to test and push through critical price points. The alt lost more than half of its value over the next 35 days as it rushed to poke its one-month mark on January 31.
While the 61.8% Fibonacci floor was solid, LUNA propelled it up, delivering a whopping 108.62% ROI from February 20 to March 2. The up-channel oscillation on the 4-hour chart helped the alt jump above its 20 EMA (red) and 50 EMA (cyan). As LUNA approached $94, the bears stepped in to fuel a sharp pullback. Historically, too, the alt has seen a reversal of this resistance.
With the 20 EMA converting to immediate resistance from support, a close below the $83-$84 range would cause the price to test its 50 EMA. Post this, if the bears continue to exert sustained strength, a further decline towards the 23.6% support could be conceivable.
On the other hand, if the bulls defend the trendline support (white), it would amount to a hidden bullish divergence with its RSI.
The RSI has fallen steadily from its overbought mark since last week. As a result, it dipped below the midline to suggest a bearish edge. Now the 45 mark support would be vital for the bulls to avoid a further decline towards the trendline support.
In addition, the -DI was looking north after abstaining from a bullish crossover. This reading would justify the near term bearish moves. Unfortunately, the ADX was in a downtrend and flashed a weak directional trend.
The next few candlesticks are critical to confirm further downtrend. A drop below the immediate support could trigger a $80 retest before LUNA makes a trend-setting move.
That said, investors/traders should keep a close eye on the broader sentiment affecting perception of the alt.
This post What needs to happen before LUNA’s market bulls can take over?
was published first on https://ambcrypto.com/what-must-happen-before-lunas-market-bulls-can-take-over/