Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Terra looked to have turned a corner after it climbed back above the $54-support level that had been flipped to resistance in late January. The short-term outlook for LUNA leaned bullish, although it was retracing some of the gains from the past week.
Lower down the charts, some good buying opportunities could be visited. If indeed the price does dip below $54, areas of demand still lay to the south where demand could be seen.
Source: LUNA/USDT on TradingView
Drawing a set of Fibonacci retracement levels from $43.47 to the swing high at $60.64, some retracement levels were plotted (yellow). In the near term, the support level at $54 and the bullish order block at $50 are of notable significance.
$54 had been an area where the price reacted bullishly in recent months, while the past few days saw a strong impulse move upwards formed around the $50-area (highlighted in cyan). At the time of writing, the price was already beneath the 23.6% retracement level, and $58 was also revealed as an area where sellers have taken control of.
In its search for liquidity, the price might have to go further south to find demand. Moreover, Bitcoin’s rejection at the $45k area and its move back below its $44.4k resistance showed that there was the possibility that BTC might move 5% lower and drag the altcoin market lower in the coming days.
In such a scenario, one where BTC sees a move toward $42k, the $50-area would become an attractive buying opportunity.
Rationale
Source: LUNA/USDT on TradingView
The RSI was unable to climb above neutral 50 and hold on over the past couple of days. At press time, it had once more slipped below neutral 50 to show bearish momentum.
The Awesome Oscillator has been above the zero line for the better part of February on the hourly chart, but the AO also pointed to decent selling pressure on LUNA recently.
The CDV dropped slightly as well, although nowhere close to the amount of buying volume over the past week.
Conclusion
Selling volume has been present over the past couple of days, and the momentum could also favor bears in the near term. The $54 and $50 levels can see a bullish reaction from the price and will be areas where demand is likely to be seen.
