Terra’s LUNA displays a lucrative pattern after the March 31 BTC-prompted downswing. The price trend developed during the past month indicates an impending upward move for the alternative token. Let us dig dip.
An Impending Rally for Terra
LUNA’s price actions formed their higher lows and three higher highs since February 28. These swing levels and trend lines show a climbing wedge formation. That reveals a bearish pattern, predicting a 20% crash towards the $78.91 mark. The target comes from adding distance from the initial swing peak and low to the token’s breakout zone.
While that seems plausible, the narrative can go the other way. Enthusiasts should expect the altcoin to overcome the topside trend-line and extend northward actions. Nevertheless, a theoretical viewpoint suggests a breakdown of the pattern. Meanwhile, climbing wedges tend to break to the upside amid massive bullish markets.
Using the FIB extension tool, crypto investors can predict the probabilities of another ATH from LUNA. Terra bulls overcame the token’s previous all-time high on March 29, setting another record peak at $110.
Thus, a surge in buying momentum to breach the climbing wedge to the upward will likely conquer the alt’s current ATH to print another one. The Fibonacci extension shows the possibilities of LUNA forming a local high around the 161.8% extension near $149 or approximately $150.
Though the technical picture can unnecessarily favor one side, on-chain metrics assist in balancing such biases. Terra had its on-chain volume surging to 4.19 billion from 2.41 billion within four days. The approximately 50% on-chain activity increase shows investors’ interest in the token’s current area. That unveils a bullish picture for Terra’s price, adding credence to narratives revealed from a technical view.
Despite the bullish case, the alt might decline before triggering upside actions. The downswings will see LUNA dropping towards the demand territory, stretching between $71.18 and $78.91. Though such a move means bearish in the short term, it might attract sidelined buyers hunting discounted prices, ensuring increased returns.
Nevertheless, a 24hr candle close under $71.18 will see the bullish narrative for LUNA fading, triggering declines towards steady support floors.