Technical Analysis: Terra (LUNA)
LUNA continues to set new ATHs. When does it stop, do we even stop at all? Read more to find out!
Table of Contents
What is Terra?
LUNA / USDT on the Monthly Chart
LUNA / USDT on the Weekly Chart
LUNA / USDT on the Daily Chart
Summary
Terra (LUNA) has been on a moon mission since late 2020. At the time of this writing, LUNA is ranked as the 12th largest cryptocurrency according to Coingecko. The market cap is sitting around $20 billion.
Is price action showing any signs of continuing? Before jumping into the charts, let’s take a step back for a second and understand what the project is about.
What is Terra?
Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. It utilizes a basket of fiat-pegged stablecoins, algorithmically stabilized by its reserve currency. Since December 2020, the network has transacted an estimated $299 billion for over 2 million users.
What is LUNA?
Luna is the reserve currency of the Terra platform. There are three core functions:
- mine Terra transactions through staking
- ensure the price stability of Teraa stablecoins
- provide incentives for the platform’s validators
In providing network security and validation, holders and stakers are exposed to the price risks associated with the asset. Why? The Terra protocol readily exchanges stablecoins for LUNA at the exchange’s rate to maintain the peg.
Great! We now have a better understanding of Terra (LUNA), time to hit the charts!
LUNA/USDT on the Monthly Chart
Looking at the log chart to keep things simple.
When you compare the price action seen at the beginning of LUNA’s market cycle with and the 2nd leg, you will start to notice a lot of similarities:
- LUNA’s low prints (3) bearish candles before printing its low
- Bullish engulfing candles confirm the bull cycle.
- When LUNA flips bullish it goes on a parabolic run.
- Highs are followed by 50–80% retracements.
Since its genesis, you can see LUNA has risen massively in the last 2 years. With a market cap of $20-billion are we going to see LUNA go through the same cycle or are we in store for something new?
LUNA/USDT on a Weekly Chart
Sticking with the logarithmic chart, and dropping a fractal from the Oct-Nov lows to the March high. See anything interesting yet?
Look at the beginning of November, now start moving to the right. Notice the vertical accumulation followed by a parabolic breakout?
Now look at the most recent price action, notice any similarities? History doesn't always repeat itself, but it does often rhyme. Today we are seeing the same vertical accumulation we experience back in late 2020. The only difference now is more and more retail investors are starting to understand the powerful tokenomics of LUNA.
What happens when institutions get involved?
LUNA/USDT on a Daily Chart
Last but not least shifting over to our trigger timeframe we get a better look at price continuing to flip resistance for support.
We haven’t seen a parabolic run since April as the price continues to show signs of a breakout. The fundamentals behind this token become really interesting when the market is in correction. After all let’s not forget LUNA is burned when investors are shifting into stable coins.
Summary
Luna is the reserve currency of the Terra platform. Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. It utilizes a basket of fiat-pegged stablecoins, algorithmically stabilized by its reserve currency.
- The monthly chart is showing a strong uptrend, with the same repetitive structure and price looking to breakout.
- The weekly chart is showing the same vertical accumulation we saw in late 2020.
- Zooming in on the daily timeframe we can see price continuing to flip resistance for support.
- The tokenomics of this token become really attractive when the market is in a correction.
Remember that this is all based on the subjective views of the writer. As always do your research — youngcryptowolf 🐺
The contents on this site are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else.
