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Active Currencies 14771
Market Cap $2,545,197,356,518.00
Bitcoin Share 51.23%
24h Market Cap Change $-0.84

LUNA will have to defend this key level to resume uptrend

2min Read

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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 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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