- 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.
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
I guess today we're running all the L1 launches of the past year that never got their time in the light. pic.twitter.com/gya2q0DBWg— Hsaka (@HsakaTrades) November 10, 2023
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.