Terra [LUNA]: Gauging the effects of a >200% two-day surge
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
The twin collapses of Terra’s UST stablecoin and LUNA fueled the market-wide crumble in May, a plunge that the investors are still recovering from. However, after this turmoil, Do Kwon and his team’s recovery efforts have rebooted LUNA. Also, its counterpart Terra LUNA Classic, alongside LUNA, have skyrocketed in the last few days.
The native token of Terra’s blockchain registered an over 200% ROI over the last two days. Even so, the coin was still down by 67.5% from its ATH, at the time of writing.
With a declining trend seen in its daily trading volumes, the price action seemed to consolidate within its up-channel (yellow) on the 4-hour timeframe.
A sustained revival can now find hindrances in the $6.5-$7 range.
At press time, LUNA was trading at $6.2965, up by 7.78% in the last 24 hours.
Source: TradingView, LUNA/BUSD
Since its all-time low on 29 August, LUNA regained its lost momentum to retest the $1.7-level. The break above this level flipped it from resistance to support while the bulls aimed to snap the $2.1-hurdle.
After testing this hurdle twice, the third test resulted in a breakout rally that put LUNA in price discovery. The altcoin witnessed a solid bullish engulfing candlestick on 9 September, one that aided the bulls in fixating a spot beyond the north-looking 20/50/200 EMA.
With bulls breaking the low volatility phase, the sellers could pose near-term bottlenecks near the upper trendline of the up-channel. A close above the $6.5-level would position LUNA for a test of the $7-$10 range before a likely reversal.
On the contrary, an immediate close below the pattern would hint at a
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