The price of Terra Classic (LUNC), formerly known as Luna, has been under heavy pressure in recent weeks, mirroring a broader sell-off in the cryptocurrency market. This article explores the technical factors influencing LUNC’s price movement and the ongoing battle between buyers and sellers.
Descending Triangle Pattern Paints Bleak Picture
Analysts point to the completion of a bearish descending triangle pattern on LUNC’s daily chart. This pattern typically indicates a continuation of the downtrend, with the price expected to fall towards the lower trendline. This bearish outlook aligns with the prevailing market sentiment, which has been dampened by factors like the Bitcoin (BTC) correction and liquidations from Mt. Gox.
LUNC Price Tumbles 73.6%, Buyers Show Tentative Signs of Life
Since March 2024, LUNC has shed a staggering 73.6% of its value, dipping below the crucial 7-month support level at $0.0000673. This drop has been accompanied by significant liquidations of long positions, totaling $400 million in the past 48 hours according to Coinglass data.
However, there are some tentative signs that buyers might be stepping in. The daily chart shows a long-tailed rejection candlestick at the current price level, suggesting some buying pressure. Additionally, the Relative Strength Index (RSI) is entering the oversold territory, potentially attracting bargain hunters looking for an entry point.
Will LUNC Break the Downward Trend?
The key question for LUNC investors is whether the price can break free from the descending triangle pattern and the resistance trendline. A successful breakout would signal a potential reversal in fortunes and could lead to a bounce in price. Conversely, a sustained break below the current support level could see LUNC retest its August 2023 low of $0.000052.
Overall Market Sentiment Remains Bearish
The broader cryptocurrency market sentiment remains bearish, with capital outflows intensifying in recent months. Analyst Ali (@ali_charts) on Twitter highlighted this trend, pointing out that the market’s realized net position change has shrunk from over $110 billion in March to a mere $20 billion today. This capital flight creates additional headwinds for LUNC and other cryptocurrencies.
Conclusion
The short-term outlook for LUNC remains uncertain. While technical indicators suggest potential for a bounce, the overall market sentiment and the descending triangle pattern pose significant challenges. Investors should carefully consider these factors before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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