Why LUNA price could drop another 20%
|- LUNA price is forming a head-and-shoulders pattern that hints at a 36% crash.
- A bounce off the weekly support level at $62 seems to have paused the nosedive to $47.28.
- A six-hour candlestick close above $75.53 will invalidate the bearish thesis for Terra.
LUNA price shows ambiguous signals as it approaches the weekly support level. A breakdown of this barrier could trigger another massive downswing, but there is a chance of a minor upswing as well.
LUNA price at the edge
LUNA price action since February 22 has formed head-and-shoulders. This technical formation contains three distinctive swing highs; the central one is the tallest one and is known as the “head”. The two peaks on either side with comparable heights are known as “shoulders”.
The valleys of the head and shoulders can be connected to form a horizontal support level at $75.53, also known as the “neckline”.
This technical formation forecasts a 36% downswing, which is obtained by measuring the distance between the head’s highest point and neckline. Adding this distance to the breakout point at $62 reveals the target at $47.28.
So far, LUNA price has crashed 18% from the neckline and is currently bouncing off the weekly support level at $62. This barrier is significant in where Terra head next. If the buyers keep struggling as they have over the past three days, a breakdown seems apparent.
In such a situation, LUNA price could crash to $47.28 and even extend lower to retest the $43.56 weekly support floor.
LUNA/USDT 6-hour chart
While things are looking grim for the altcoin, a six-hour candlestick close above $75.53 will invalidate the head-and-shoulders bearish thesis for LUNA price. In such a case, Terra could attempt to set a higher high above the $87.84 resistance barrier to trigger a further ascent.
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