Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Bitcoin’s resurgence over the past few days has had a cascading effect on the altcoin market. The likes of meme coins, NFTs, and DeFi tokens capitalized on this bullish sentiment and kept up with the industry leader.
Leading the charge among DeFi tokens was LUNA. Its 11% surge over the last 24 hours made it the highest percentage gainer amongst its peers. On the charts, the altcoin embarked on a fresh upcycle. Ergo, it can be tipped to register a new ATH soon.
LUNA 4-hour Chart
Source: LUNA/USD, TradingView
A closer look at the chart showed that LUNA recorded its first wave upwards in late September. The second upcycle was triggered at the $33.3-support. This pushed LUNA to an ATH of $48.2. Overall, these two waves highlighted a remarkable 110% surge in just two weeks.
From here, the Fibonacci Extension tool highlighted potential target areas as LUNA prepares for its next upcycle. A close above the 61.8% Fibonacci Extension level on strong volumes would allow LUNA to push onwards to its 100% Extension level before the next correctional phase.
Meanwhile, bears can hit back after a double top at $49.6. Such an outcome would see LUNA reset at its defensive zone of $41.3 – A development that would expose LUNA to a sell-off towards the $35-mark.
Reasoning
After a rebound from 50, the Relative Strength Index paved the way for more growth before testing the overbought territory. Moreover, the Directional Movement Index’s reading can be expected to generate additional buying pressure after the +DI crossed above the -DI.
Similarly, the MACD will also present buy signals after completing a bullish crossover.
Conclusion
LUNA’s trajectory, combined with bullish readings on most of its indicators, opened the gates for a fresh ATH. Once a double top at $49.6 is successfully negotiated, LUNA will look to challenge its 100% Fibonacci Extension level close to the $57-mark.
This represented another 37% jump from LUNA’s press-time level.
