Terra mark mark that preceded an 80% LUNA rally is encourage

A technical setup that preceded a circa 80% mark rally in the Terra (LUNA) market in August 2021 has looked again.

LUNA paints bullish MACD crossover

The technical setup consists of a so-called “mark line crossover” between LUNA’s weekly MACD line — equal to the distinction between the token’s 12-week and 26-week transferring averages (MA) — and the 9-week MA called the Ticket Line, plotted above the zero line, as confirmed in the chart below.

LUNA/USD weekly MACD illustration. Source: TradingView

Together, these lines signify Transferring Moderate Convergence Divergence (MACD), a momentum oscillator to search out out a market’s course and momentum.

So, if the MACD line crosses above the mark line, markets interpret it as a bullish MACD crossover. Conversely, a bearish MACD crossover occurs when the MACD line falls below the mark line.

LUNA’s weekly MACD line closed above its mark line earlier this month, raising speculations about a robust bullish momentum ahead. Let’s assume, just market analysts “Argonauts” cited a identical bullish crossover from August 2021 that came about before the Terra token’s circa 80% mark rally — from $12 to $102.

Something is up on $LUNA weekly timeframe. Final time the MACD crossover occured it sent $LUNA from $12 to $106. #luna #nfa pic.twitter.com/9TYyGmp88j

— Argonauts (@terra_hodler) March 20, 2022

Bearish divergence detected

The MACD-based exclusively mostly bullish outlook in the Terra market moreover stems from LUNA’s unbelievable mark performance in the final thirty days.

Seriously, LUNA’s mark has surged by almost 90% after bottoming out at $47.25 on Feb. 20, now eyeing a dash-up above $100.

However, the Terra token’s strong upside switch accompanies a reducing momentum, as illustrated by its weekly relative strength index (RSI), and weakening trading volumes, suggesting bullish exhaustion is shut.

LUNA/USD weekly mark chart that consists of mark-momentum bearish divergence. Source: TradingView

Therefore, a pullback from ranges near $100 could seemingly private LUNA retest its previous resistance-grew to change into-pork up ranges near $75.50 and $50, coinciding with the 0.236 and 0.5 Fib lines, respectively, of the Fibonacci retracement graph attached below. 

LUNA/USD weekly mark chart that consists of Fibonacci retracement pork up/resistance ranges. Source: TradingView

LUNA mark double-high dangers

LUNA’s shut above its previous document excessive of round $106 could seemingly private it enter unchartered territory with a Fibonacci retracement graph drawn from $102-swing excessive to $45.50-swing low, suggesting an prolonged upside switch against $138.

LUNA/USD weekly mark chart. Source: TradingView

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Nonetheless, a pullback switch from ranges near $100 could well moreover trigger the classic double-high setup, which entails two excessive aspects available in the market, signifying an impending bearish reversal mark. LUNA could well paint one in the upcoming weeks, as confirmed in the chart below.

LUNA/USD weekly mark chart that consists of ‘double high’ setup. Source: TradingView 

In a “finest” double high scenario, the Terra token would possibility crashing by extra than 50% to $44 on the next pullback, adopted by a breakout switch against $19.50, moreover coinciding with LUNA’s 50-week exponential transferring moderate (the crimson wave). 

The views and opinions expressed right here are exclusively these of the author and kind no longer basically replicate the views of Cointelegraph.com. Every investment and trading switch consists of possibility, you ought to conduct your individual analysis when making a decision.

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