Terra (LUNA) has slipped back below the £80.9 area after initially rising above it, likely validating it as resistance yet again.
Since hitting an all-time high of £94.8 on April 5, Terra (LUNA) has been declining. On April 18, the price fell to a low of £60. Since then, the price has risen. Above the £80.9 region, the all-time high and subsequent dip have created a bearish drift. The token was expected to confirm the £80.9 area as support after the breakout.
On the contrary, LUNA dropped through the area, which is now likely to serve as resistance once more.
Furthermore, bearish divergences in the RSI and MACD foreshadowed the decline. Major bearish trend reversals are frequently preceded by such divergences. Their occurrence on a weekly basis adds to their significance and signals that a peak may have been reached.
The significance of the £80.9 resistance area is underscored by the daily time frame, which indicates a solid resistance at £77.7, which is produced by both the 0.5 Fib retracement resistance level and a horizontal resistance area. As a result, the entire £77.7–£80.9 range is regarded as strong resistance.
Price activity and indicator readings, on the other hand, give contradictory signals. LUNA formed a bearish hammer candlestick within the £77.7 resistance area on April 21.
On April 25, the price formed a bullish candlestick after a minor decline.
Both the RSI and the MACD give varied results. While they are both rising, neither has a significantly upward moving slope to indicate an increase in momentum.
Moreover, despite the RSI being over 50, the MACD is still negative.
Despite these being bullish indicators, they aren’t quite enough to counteract the weekly time frame’s bearishness.
The ascending trend from January 31 to April 5 resembles a five-wave pattern. If this is the case, the resulting decrease will most likely make an A-B-C corrective structure. LUNA appears to be in the B wave, which will be followed by another drop.
The 0.5-0.618 Fib retracement resistance level at £77.7-£81 is the most likely region for a rejection. This is a long-term resistance level, in addition to being a key Fib resistance.