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Analysis

Assessing LUNA bulls’ leverage to push past this order block

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Terra has had a solid run on the charts in recent weeks. In early March, news emerged that $30 billion worth of LUNA was staked across various platforms, compared to Ether at $27 billion. This coincided with a strong rally on the charts, backed by genuine demand.

Over the past few days, this bullish impetus has lost some steam and the price has been trading within a range. Is a breakout imminent or are the bears sharpening their weapons for combat once more?

LUNA- 1HLUNA at a short-term supply zone, could it be headed back to the range lows?

In white is a range from $85.1 to $94.8, one that LUNA has traded within for the most part of the past week. This range, despite the deviation to $83, holds significance because of the importance of the mid-range level at $90 (white dotted). This level has acted as support and resistance consistently for the past week.

The price action indicated that on 14 March, a test of the range highs was followed by a bearish engulfing candle. This was indicative of a bearish order block at the range highs (red box) and a zone where sellers are likely to be strong once more.

A rejection here would likely see LUNA head back towards the range lows in search of liquidity.

Rationale

LUNA at a short-term supply zone, could it be headed back to the range lows?

Source: LUNA/USDT on TradingView

The indicators also appeared to favor a move to the downside. The RSI, even though it showed strong bullish momentum, set equal highs while the price made higher highs. This pointed towards the possibility that momentum has run out of steam even as the price pushed higher.

The Stochastic RSI formed a bearish crossover in the overbought territory while the OBV has not registered a new high in the past week.

This could all change in the next few hours if LUNA can break past the $94.5 zone and retest it as demand. However, as things stood at press time, a move back towards $90 and $85 appeared likely.

Conclusion

The indicators underlined the possibility of a move towards its range lows for LUNA. The price action showed a clear order block at $94, one that could decide the direction of the next move for the altcoin.

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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