LUNC is trading at $0.00012 after a significant recovery from its recent decline.
The positive divergence could help LUNC price climb towards $0.00014.
If buyers are absent, LUNC may not return to support at $0.00011.
After hitting a low of $0.00011 on January 3, the price of Terra Luna Classic (LUNC) surged and recently reached $0.00013. The increase represents a price increase of approximately 30%. Despite the race, LUNC was unable to hold on to the region.
At press time, LUNC was trading at $0.00012, based on CoinMarketCap data. Ten days ago, Coin Edition reported how LUNC had captured the market's attention. Meanwhile, the cryptocurrency has shown indications that it could enter the top 50.
However, data at the time of publication showed that LUNC's market cap was at number 89. In terms of price action, the 4-hour chart showed that a descending channel pattern had formed.
LUNC tries to escape
From the chart below, the trendline has moved below different support levels. On December 26, the bulls were unable to defend the $0.00014 support. The price therefore fell. Support then fell to $0.00012 on January 4. The price has fallen again.
However, the subsequent drop to $0.00011 seemed to be the breakthrough LUNC needed. Buying pressure pushed the price back up to $0.00012. Furthermore, trend signals suggest that the price could quickly move higher and reach $0.00014 again.
The RSI also formed a positive divergence by forming higher lows. If LUNC price makes lower lows, this could confirm the bias and possibly trigger a breakout.
However, the RSI is just one of many indicators needed to help LUNC make the prediction. The Awesome Oscillator (AO) indicators showed the reading was negative.
LUNC/USD chart on 4 hours (Source : TradingView)
This negative reading implies that the 5-period MA was not higher than the 34-period MA, suggesting bearish momentum. However, the trend can quickly reverse if the purchasing dynamic accelerates. If this happens, LUNC could reach $0.00014.
On the other hand, a shortage of buyers could cause the LUNC price to continue hovering around $0.00011.
A move to $0.00014 is likely
Data from Coinglass showed that open interest had declined significantly. At press time, LUNC's had fallen to $6.9 million. By the end of December 2023, this amount reached $20 million.
This decline implies that market participants are increasingly closing their net positions. Additionally, short positions with open positions were more aggressive than long positions.
