Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought-about funding recommendation
LUNA’s ascending wedge has been forming for over a month and it’s now, threatening a possible 46% sell-off. Merchants should be cautious of an in depth under the confluence of the 4-hour 200-SMA (inexperienced) and 23.6% Fibonacci stage, one which may set off a bearish end result. In the meantime, bulls can intention for an early cut-off on the 38.2% Fibonacci stage – A zone that held up a dependable help stage in October.
On the time of writing, LUNA was buying and selling at $51.5, up by 4.9% during the last 24 hours.
LUNA 4-hour Chart
Supply: LUNA/USD, TradingView
Three increased highs arrange at $41.5, $49.5, and $61, together with three increased lows at $27.2, $41.3, and $48.4, outlined an ascending wedge on LUNA’s 4-hour chart. Based mostly on the best peak and the bottom valley throughout the bearish sample, LUNA eyed a 47% drawdown from the breakout level. Ought to LUNA forego its streak of upper lows and weaken under the 200-SMA (inexperienced) and 23.6% Fibonacci stage, sellers can drive the value all the best way to $23.52.
Bulls can counterpunch instantly on the 38.2% Fibonacci level- A zone that enabled a reversal following a double prime at $49 in October.
On the flip facet, an upwards breakout might be doable if LUNA registers a right away shut above $55, backed by sturdy volumes. Such an end result would set LUNA heading in the right direction for $81.
Reasoning
The 4-hour RSI traded inside a gradual down channel, forming a number of bearish divergences with respect to LUNA’s worth motion. Such alerts are generally noticed earlier than a retracement takes place.
Having stated that, LUNA may prolong its wedge over the close to time period because the MACD and DMI had been nonetheless inside favorable positions.
Conclusions
LUNA can consolidate near $55 because the MACD and DMI shift to bearish positions. As soon as sellers reply to such cues, LUNA would break south of its wedge and arrange a possible 47% sell-off.
Merchants can go quick as soon as LUNA closes under the confluence of its 200-SMA (inexperienced) and 23.6% Fibonacci stage and set take-profits at $23.5.
