LUNA Price Prediction: 15% Sell-off Incoming If Price Slips Below Cruial Level

Saif Naqvi
LUNA
Source: Terraform Labs

While a bullish broader market trend continues to be elusive as 2021 draws to a conclusion, cryptocurrency investors have remained optimistic on LUNA. The token currently boasts a 70% Return on Investment over the last 30 days – the highest percentage returns among the top 10 coins by market cap.

However, overbought readings on the RSI suggest that the alt is extremely prone to profit-taking. Should its price weaken below a strong support area, traders must brace for a possible 15% sell-off. At the time of writing, LUNA traded at $75.7, up by 2.7% over the last 24 hours.

LUNA 4-hour Chart

Source: TradingView


LUNA has traded within a steady up-channel over the past six days after witnessing a 33% decline between 9-14 December. Following a near 60% surge over the last four days, a minor drawdown was currently in effect as the RSI hit overbought levels. Ideally, the confluence of the 20-SMA (red) and 50% Fibonacci level should allow new longs to set in and extend the coin’s value above near-term targets of $84 and $92.7.

However, LUNA could take a major hit should its price weaken below the aforementioned safe zone. The lack of established support zones could see the price tank by nearly 15% and find its way to the 23.6% Fibonacci level.

Indicators

LUNA’s 4-hour RSI gave a big hint into LUNA’s near-term price trajectory. Even though the index traded in bullish territory, its lower sloping trendline had now flipped bearish. Should multiple bearish divergences now line up on the chart, similar to the ones observed during early December, LUNA would take a southbound turn. The MACD didn’t do much to ease these concerns. The index was close to a bearish crossover as upwards momentum was losing pace in the market.

Conclusion

Traders must be cautious of a possible 15% decline should LUNA weaken below the 50% Fibonacci level and 20-SMA (red). However, this does not mean that short-selling would be a straightforward strategy. LUNA still traded above the 20, 50, and 200 Simple Moving Average lines and an extended rise above $92 was still on the table.