• Terra price action has formed a medium-term bearish Japanse candlestick pattern.
  • LUNA price drops back in search of support.
  • Expect a drop back to $0.000112 before support kicks in.

Terra (LUNA) price action is facing headwinds from both sides as a technical candlestick pattern is throwing a spanner in the works, together with that long-feared dollar strength that is re-emerging after several warnings from Fed officials towards the markets and as most of the dollar weakness got erased in the final trading hours on Friday. These two elements show the weak spot for Terra price action as we advance and look set to drop in search of support towards $0.000112 near the 78.6% Fibonacci level. At risk is even a full swing back towards sub $0.000100.

LUNA price is no match for two headwinds

First, Terra price action reveals daily a ‘Grave Stone Doji’ from Wednesday and Thursday. Characteristics are that first, there is a big bullish candle like the one on Wednesday after the lower CPI print, followed the next day by an inverted hammer, but with no wick at the bottom. What follows is often a sell-off of multiple days until at least below the low of the price action from Wednesday. Translated, that would mean a drop of a minimal 4% is granted in search of support near the 61.8% Fibonacci level at $0.000107.

LUNA price next could tumble again as the dollar strength kicks in again on Friday, the University of Michigan revealed that inflation expectations are still higher, meaning that the Fed will continue to hike, and thus the dollar outweighs several cryptocurrencies in that equation. This could be the catalyst that pushed LUNA below the green ascending trend line and dropped 20% towards $0.000095 at the 23.6% Fibonacci level. With this move, all of the incurred gains for July and the summer have evaporated.

LUNA/USD Weekly chart

LUNA/USD Weekly chart

An upside surprise could come from some easing tensions out of Ukraine, positive headlines around supply chain issues getting resolved or more drops in inflation. Any one of those helped with a weaker dollar would bring LUNA price action towards $0.000137 at the 61.8% Fibonacci level to the upside. This could come with a bounce of the $0.000118 baseline in case it holds over the weekend.


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.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

XRP struggles to make comeback above $0.50 as Ripple CEO will face trial

XRP struggles to make comeback above $0.50 as Ripple CEO will face trial

XRP remains range-bound under the $0.50 resistance on Friday after news that Ripple CEO Brad Garlinghouse will have to face a trial in California regarding some statements he made in 2017. 

More Ripple News

Bitcoin Weekly Forecast: Is BTC out of the woods?

Bitcoin Weekly Forecast: Is BTC out of the woods?

Bitcoin appears poised for a slight decline this week, influenced by factors such as the German Government's deposit of over 1,700 BTC in exchanges, decreasing outflows in US spot ETFs, and on-chain data indicating no signs of BTC DeFi liquidation.

More Bitcoin News

1Inch looks poised for downward correction

1Inch looks poised for downward correction

1inch price moves lower by 3% on Friday after being rejected by the 200-day Exponential Moving Average on Thursday. On-chain data shows a decline in Development Activity, signaling negative sentiment among 1INCH investors. 

More Cryptocurrencies News

LayerZero ZRO token tumbles 24% in 24 hours, hit by airdrop-related controversy

LayerZero ZRO token tumbles 24% in 24 hours, hit by airdrop-related controversy

LayerZero’s ZRO token airdrop went live on Thursday, with a claiming mechanism called Proof of Donation. The team requires 10 cents in USDC, USDT or Ether per ZRO token with the aim to weed out manipulative Sybil entities. 

More Cryptocurrencies News

Bitcoin: Is BTC out of the woods?

Bitcoin: Is BTC out of the woods?

Bitcoin (BTC) appears poised for a slight decline this week, influenced by factors such as the German Government's deposit of over 1,700 BTC in exchanges, decreasing outflows in US spot ETFs, and on-chain data indicating no signs of BTC DeFi liquidation. Technical indicators suggest BTC might experience a 3% correction in the near term before continuing its upward trajectory.

Read full analysis

BTC

ETH

XRP