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LUNA will have to defend this key level to resume uptrend

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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

Bitcoin hit the $52k-mark but ran into strong sellers and was unable to push higher. LUNA touched its all-time high at $103.6 and was pulling back, at the time of writing. Momentum had swayed back in favor of the bears, but the $84-$86 area has served as support in recent days.

A failure to halt the bears at this level could swiftly take the crypto back to $72.

Source: LUNA/USDT on TradingView

The move from $37.82 to $78.22 presented 27.2% and 61.8% extension levels at $89.21 and $103.19, respectively. These extension levels generally see the trend halt, at least temporarily.

The ATH of $103.6 was very close to the $103.19 extension level where sellers asserted their will on the market. The 21 SMA (orange) on the 4-hour chart has acted as support for LUNA on its uptrend over the past couple of weeks, but it couldn’t hold on during the third test.

At the time of writing, the 55 SMA (green) had some confluence with the $89.2-level, with the $84.5-level as another area of possible demand for LUNA. A close beneath $84 will likely take LUNA to $72 in search of liquidity.

Rationale

Source: LUNA/USDT on TradingView

The Awesome Oscillator slipped beneath the zero line to show bearish momentum, while the CMF was also under -0.05 to show capital leaving the market. Both underlined seller strength.

The OBV neared a level of possible support (orange). If the OBV closes beneath this, it would be more likely that LUNA prices would also drop. The inference here is that the buyers simply haven’t been able to absorb all the selling pressure and are close to exhaustion and could soon capitulate.

The $72-$76 area (cyan box) would be the next area where buyers can be expected to put up a strong fight. Especially if LUNA loses the $85 area.

Conclusion

Bitcoin was unable to climb past $50k and LUNA found support at the $89-level. Momentum seemed to be leaning towards the bears, with the moving average crossover (21 and 55 periods) unseen seen on this timeframe.

Both Bitcoin and the $89-area will be under close scrutiny by LUNA bulls for signs of buyer strength.

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Akashnath S is a Senior Journalist and Technical Analysis expert at AMBCrypto. He specializes in dissecting price action, identifying key market trends through advanced chart patterns, and forecasting both short-term and long-term asset trajectories. His distinct analytical method is grounded in his academic training as a Chemical Engineer. This background provides him with a systematic, process-oriented approach to market data, enabling him to analyze the complex dynamics of financial markets with precision and objectivity. Having actively covered the cryptocurrency space since the landmark 2017 market cycle, Akashnath possesses years of experience navigating both bull and bear markets. This seasoned perspective is critical to his insightful reporting on market volatility and evolution. As an active market participant, Akashnath enhances his analysis with crucial, hands-on experience. This practical application of his technical skills ensures his insights are not merely theoretical, but are also relevant and actionable for an audience looking to understand and navigate trading opportunities. He is dedicated to educating readers on the nuances of technical analysis, empowering them with the knowledge to make more informed financial decisions.
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