Terra has gained 226% in the last 9 days and 45.8% in the last 24 hours alone. It also witnessed high trading volume in recent days.
The rally was likely a result of the Terra Chain v2.18 update.
Multiple Time Frame Analysis Highlights Terra’s Upside Potential
Source: LUNA/USDT on TradingView
The weekly chart indicated that the structure had been bullish, for now. A weekly session close above $0.168 would confirm this change. This high was important because it precipitated the previous bearish move.
The strong trading volume of the last two weeks was reflected in the OBV, which surpassed the December 2024 highs. This was encouraging for the bulls.
The RSI also signaled that bullish momentum had been established with a reading above 50.
The next horizontal resistances to watch are $0.28, $0.51, and $0.72.
Source: LUNA/USDT on TradingView
The bullish outlook was reinforced on the 4-hour chart. The demand zone (cyan box) of $0.148 to $0.163 overlapped the 61.8% Fibonacci retracement level at $0.155.
Furthermore, the imbalance (white box) is likely to see a bullish reaction on a retest.
The confluence of demand zones around $0.16 meant that any Terra [LUNA] Falling prices in this region would present a buying opportunity.
Examining the bearish case
The RSI H4 could form a bearish divergence in the coming days. This would be an early warning of a possible setback.
If this pullback, combined with high selling volume, pushes prices below the $0.15 area, it would be problematic for the bulls.
Call to action for traders: Is it viable to go long LUNA?
The bearish scenario was less likely to develop, due to the bullish weekly and 4-hour outlook.
The $0.16 area is also solid support that the bulls should be able to defend. The OBV reflects sustained buying pressure over the past week.
Therefore, traders can look for long positions in the $0.16 to $0.18 area. The Fibonacci extension levels at $0.283 and $0.34 would be the bullish price objectives.
Final thoughts
- The Terra upgrade would bolster network security and reliability and has boosted trust.
- In the short term, another 30%-50% rally is possible, but it could be preceded by a price drop towards $0.18.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.