Evaluating the 25% correction buffer that keeps LUNC’s macro structure valid
LUNC could fall further without shifting the altcoin's bullish price structure.
Towards the end of April, Terra Classic’s [LUNC] price approached the 9-month resistance level at $0.000072. At the time, the Awesome Oscillator momentum indicator as well as the A/D volume indicator made a bearish divergence with the upward price trends on the 4-hour chart.
Two weeks later, the altcoin was about to retest the same resistance level as support. It had rallied by 69.7% beyond the multi-month resistance to reach a swing high of $0.000123.
The lower timeframe weakness the bulls exhibited back then was blown away by the strength of the following demand though. Now, that same level is being tested.
LUNC bulls’ conviction will be tested
Terra Classic bulls have a chance to show their strength. A strong reaction from the $0.000072-level would cement their dominance in the market.
The technical indicators supported their bid for supremacy. The MFI has receded in recent days, but continued to show capital inflows. Also, bullish momentum seemed to have the upper hand too.
The CMF unambiguously showed buyer dominance with a reading of +0.11 to signal sizeable capital inflows. The rally two weeks ago saw above-average trading volume for a sustained period as well.
A price drop below the former resistance would not be catastrophic, but as things stand, the bulls can likely drive a move higher from $0.000072.
The 4-hour chart revealed that the $0.000066-level has also been an important local support zone. A drop below this swing point can see the prices revisit the $0.00004-$0.00005 demand zone.
The 1-month liquidation heatmap agreed with the 4-hour chart. It marked the $0.000066-level as a key liquidity pocket. The $0.000057-$0.000060 zone is another magnetic zone to keep an eye on.
Traders shouldn’t be in a hurry to buy, despite the recent gains. Instead, they should gauge the altcoin’s reaction from these support levels to understand if a bullish continuation has begun.
Final Summary
- Terra Classic’s rally underwent a pullback on the charts.
- Price could fall by another 13% to 25%, while also keeping long-term bullish hopes intact.
