LUNA price takes off! Why A 40% Monday rally could be the start of much more

Terra’s LUNA price has surged in applaudable fashion. The move could be the beginning stages of a larger countertrend rally.

Terra LUNA price retaliates

Terra’s LUNA price woke the market up on Monday morning. The controversial crypto token has rallied 40% in just hours as an uptick in volume persists on lower time frames.

The move is the first sign of positive reinforcement following the 75% decline in September. Before the mudslide, LUNA had risen 300% in a week. The newfound bullish price action could be the continuation of the FOMO rally.

LUNA price currently auctions at $2.70. The bulls have successfully breached the 8-day Exponential Moving Average on smaller time frames. The Relative Strength Index shows LUNA finding a floor at an ideal level for market bottoms which compounds the idea that the deep profit-taking consolidation could end. 

An Elliott Wave analysis of the chart suggests price may be about to start a strong bullish wave 3 that will surpass the $7.71 September highs. It is possible that price may have just finished completing a wave 2 correction that began when price peaked between September 9-11. If wave 3 is now in motion it will likely be much stronger and fiercer than the first rally in early September.

LUNA USDT 1-Day Chart

Still, the bulls have more fuel to pour onto the market before confidence ensues. A break above the 21-day Simple Moving Average hurdle would be required as a prerequisite before expecting more upside, but once beaten, could lead to a 50% rise, up to the level of a previous resistance zone. 

Invalidation of the bullish thesis depends on the August 29 swing low at $1.51 remaining unbreached. If this level were to get tagged, it would void the entire uptrend scenario.

In the following video, our analysts deep dive into the price action of LUNA, analyzing key levels of interest in the market. -FXStreet Team