After exploding by more than 415% in Q4 last year, LUNC price peaked at $0.00028 in December. What followed this outstanding rally was an equally strong correction, with Terra Luna Classic falling by 68% to the lowest point in 2024 at $0.000087 in January.
Profit-taking and the general outlook of the crypto market contributed to the pullback. However, Q1 has come with its own set of market-driving forces, starting with the Bitcoin ETF.
LUNC Price On The Cusp Of 18% Drop
LUNC mirrored Bitcoin and Ethereum’s trend in the past weeks, rising to $0.00014 in February. But the markets are not immune to corrections, and neither is Terra Luna Classic, which currently holds at $0.00012.
The crypto ranked 115th is down 6.5% today, mimicking Bitcoin’s 2% plunge to $51,134. Some altcoins are also in the red, with Solana, Cardano, and Chainlink losing 7%, 4%, and 6.2%, respectively.
Some may argue that LUNC’s falling trading volume at $56 million implies lower interest among traders. While that may be true, it is not unique to Terra Classic, considering a 1.8% dip in the total market to $1.95 trillion.
The red and green bands on the chart below highlight two key ranges traders would be watching closely in the short term. The green region coinciding with the up-trending channel’s support must be defended to increase the chance of an immediate recovery.
On the upside, the red marked area represents the stubborn short-term resistance. Bowing to selling pressure at $0.00014 signaled more traders to short LUNC, or close their long positions, further weighing the token down.
Failure to find relief at the channel’s middle boundary support accentuated the sell orders.
The bearish crossover in the Moving Average Convergence Divergence (MACD) paints a grim picture for LUNC this week. Short orders will remain profitable until the green area support flips.
Terra Luna Classic has been accepted back into the ascending channel before and this may bolster the hope for an immediate rebound. The 200-day Exponential Moving Average (EMA) at $0.000116 could become important if losses overshoot the green band.
With that in mind, it would be worth keeping a close eye on the price of Bitcoin. If the dip below $52,000 gets filled quickly, it would mean a stronger trend reversal towards $54,000.
A bullish outcome in Bitcoin is expected to change sentiment across the market, helping altcoins like LUNC stabilize ahead of the next move up.
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