Is the Terra Luna Classic price setting up for a steep retracement?

Terra's Luna Classic price confirms the bullish trade idea mentioned in the previous outlook. Traders should be wary of the profit-taking consolidation as a deeper pullback could occur.

 Luna Classic price in question

Terra's Luna Classic price broke up by 17% to the upside last week, tagging the liquidity above December's high at $0.00019437. During the breach on January 14, the volume indicator saw an influx of $411.5 billion in transactions, the largest trading day in all of 2023. After tagging the liquidity level, the daily candlestick closed bearish, which could be a subtle cue that the bullish intentions to collect liquidity have been fulfilled and that a market reversal could be on the horizon.

Luna Classic price currently trades at $0.00017666 as profit-taking bears have forged a 10% decline since the aforementioned target zone was breached. The Relative Strength Index (RSI), an indicator used to gauge market performance by evaluating previous swing points, shows the current LUNC price in a make-or-break situation.

The recent high in the RSI stopped just above the breakout range around 70, indicating that the upward trend that started in the last week of December is still a temporary reversal of the current trend. The previous decline landed in oversold territory on December 20, which suggests the bears are still in control of the larger trend.

If the market is making a turn for the worst, the next bearish target would be the January 8 swing low at $0.00014800, resulting in a 16% decline front the current market value.

LUNC/USDT 1-day chart

Invalidation of the bearish thesis could arise from a daily closing candlestick above $0.00020000. The confirmation could provoke a rise towards the midpoint of November’s trading range near $0.00023200, resulting in a 30% increase from the Luna Classic price.