Terra Classic [LUNC] on a bullish rampage as demand picks up

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Terra Classic and its native token LUNC are the original coin and chain, identifiable by the “Classic” in their name. The collapse in May for the Terra chain was followed by a tumultuous June. The fork in late May brought into being LUNA and LUNC, with the new chain Terra not being pegged to the TerraUSD (UST).

With regards to price action, LUNC had a quiet couple of months in July and August. September saw the coin surge 160% at its peak. A pullback was in progress. Could LUNC offer short-term traders a buying opportunity?

LUNC- 2-Hour Chart

A set of Fibonacci retracement levels (yellow) were plotted based on the move from $0.00022 to $0.00059. At the time of writing, the price was just above the 50% retracement level of this move. To the south, the 61.8% retracement level had confluence with a demand zone for LUNC.

A few days ago the price saw a strong surge from the $0.00034 mark. This surge measured 74% by itself. The previous day of trading saw a long candlewick to the south on the 2-hour chart which tested the 61.8% retracement level.

A revisit to those lows could occur over the weekend. Such a dip would offer a buying opportunity. Invalidation of the bullish notion would see LUNC drop further, to the $0.000325 mark and lower.

Rationale

The Relative Strength Index (RSI) dropped below the neutral 50 mark in recent hours. This highlighted short-term bearish momentum. However, the momentum wasn’t especially strong yet, and the overall trend remained bullish. The Stochastic RSI was at the oversold territory as well, and added a little strength to the idea of a bounce in the coming hours.

The On-Balance Volume (OBV) was far more encouraging. It has formed a series of higher lows in the month of September. The swell upward was indicative of rising demand for LUNC. This demand could further drive the rally.

Conclusion

The indicators pointed toward a bullish bias for LUNC in the days to come, although a pullback was in progress. The price action suggested that a good buying opportunity could arise at around the $0.00036 level.

Although Bitcoin has posted solid gains over the past few days, its longer-term trend was downward. Hence, LUNC bulls might want to take profits aggressively.