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  • Terra Luna price peaked 85% to test the $0.878 resistance level, reaching levels last tested in June.
  • Being overbought, LUNA could drop 10% to test the $0.742 support level unless it breaks and closes above $0.878.  
  • The bearish thesis will be invalidated if the altcoin breaks and closes above $0.878, which would bring $1.000 within sight.

Terra Luna (LUNA) is trading with a bullish bias, featuring among the Layer 1 (L1) tokens that are on a tear as the broader market ushers in what appears to be the beginning of a bull market. Meanwhile, some analysts say late or sidelined buyers, particularly for Bitcoin, could find themselves still sidelined as the king of cryptocurrency rages on.

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC rages on, $40,000 may not be hopium after all

Terra Luna among Layer 1 tokens reaping hard

Terra Luna (LUNA) is among the L1 tokens that are rallying, having its time in the light alongside Solana (SOL), and Avalanche (AVAX), among others, which are up 25% and 15% respectively. The surge has LUNA testing levels last seen in June, heading into the weekend with a bold thrust

Terra Luna price on a tear, but 10% correction seems likely for LUNA

Terra Luna (LUNA) price broke out almost 90% to record an intra-day high of $0.874, before a 5% correction as the altcoin suffered the effects of an overbought asset. The move saw LUNA shatter past a fair value gap (FVG), which is basically an imbalance in the market.

For the layperson, an FVG is an area that offers price inefficiencies. The price of an asset tends to go back to those areas and fill the gap with some more trades. An FVG therefore acts as a magnet for the price of the asset. It tells a trader the possible future direction of the price as it tries to achieve balance in the market.

Based on momentum indicators, LUNA is massively overbought. Nevertheless, its northbound trajectory shows that the price could still rise. Traders can therefore take this as a precaution, that while they should not add to their positions, neither should they close their existing positions as more gains could be incoming.

Increased buying pressure could see Terra Luna price break past the immediate barricade at $0.878 before clipping the $0.900 psychological level.

In a highly bullish case, the gains could extend for Terra Luna to tag the $1.000 psychological level. Such a move would constitute a 20% climb above current levels.

The Awesome Oscillator (AO) indicator supports the outlook, showing bulls are leading the market. This is indicated by its position in the positive territory, coupled by the shade of the histogram bars in green.

Net volume is also on the rise, as shown in the chart below, with CoinMarketCap data showing a 24-hour trading volume increase of 520%. With both price and trading volume soaring, it points to strong interest in the asset by buyers.

LUNA/USDT 1-day chart

On the flipside, with LUNA being overbought, a correction could play out soon, sending Terra Luna price south, first losing the $0.742 support level. In the dire case, the slump could extend for the crypto to test the FVG. A break and close below the midline of this order block at $0.642 could confirm the continuation of the downtrend.

The ensuing selling pressure could send Terra Luna price to the $0.561 support level, approximately 30% below the current price.

 

 

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