The cryptocurrency market was experiencing a relief rally during the early hours of Wednesday and none looked stronger than that of LUNA’s. The world’s ninth-largest digital asset lined up six consecutive green candles on the lesser timeframe after falling to a 3-month low. However, the rally would stand the real test of time as it attempts to shift beyond some rigid price barriers amid an RSI which neared the oversold zone. At the time of writing, LUNA traded at $57.3, up by 14% over the last 24 hours.
Terra Ranks On Social Media Platforms
Before diving into the chart, it’s worth noting that Terra (LUNA) was briefly trending on social media platforms. Interestingly, Santiment revealed that a high social dominance score, the combined bearish trading outlook can lead to positive price action. LunarCrush backed the figures, with Terra’s weekly social volume sitting at a healthy 14%. However, there were some caveats involved. The weekly social dominance had declined to -0.2%, meaning that other coins were commanding more social media attention at the moment. With that said, LUNA’s near-term was certainly bullish but a declining dominance could limit LUNA’s upside to a few overhead price barriers.
LUNA 4-hour Time Frame
Helped by a daily demand zone between $43.4-$49.5, LUNA‘s price was amidst a fast rally that had traveled past the 23.6% and 38.2% Fibonacci levels. Heading forward, however, the bullish mettle will be tested.
The next point of contact was being made at the golden 50% Fibonacci level – an area where weak rallies are often rejected. The 61.8% Fibonacci area contained 8 February’s swing high of $60.6, which was also a significant area on the chart.
Furthermore, a study of the Visible Range profile revealed that since 22 November, 80% of all LUNA trades were placed between $77.7 and $48.8, while the highest trades were placed around $65, also known as the point of control (POC). This means that historically, LUNA has seen a large chunk of sell pressure around its POC and the same could be an enticing take-profit for traders. Meanwhile, the RSI was also zoning in on overbought territory and upside potential would be limited.
Conclusion
LUNA’s upside was expected to be capped at 12% from its press-time level. The 78.6% Fibonacci area contained the Visible Range’s POC and the same was an ideal take-profit for traders. However, the near-term was bullish and those who have missed out on the run can place long bets at $58. In either case, caution must be maintained as a bearish double top was also present at $60.8 before the price makes way to $65.