Terra’s struggled to maintain its uptrend as it neared a key area of demand.
The central theses
- Terra plummeted over the past 48 hours amid mounting macroeconomic uncertainties.
- LUNA has been impacted by the recent market downturn, despite the Luna Foundation Guard announcing a $1.5 billion purchase.
- Once LUNA breaks the $77.70 support level, it could suffer a brutal crash.
Terra’s LUNA approached a crucial support level that could determine its future price action. As the macroeconomic outlook deteriorated, LUNA was threatened with a sharp decline.
Terra’s LUNA at Vital Support
Terra faced a downturn as market participants became increasingly concerned about the global economic outlook.
The LUNA token of the Layer 1Blockchain is down more than 10% at the time of writing, falling from a high of $87.80 to a low of $78.80. The bearish momentum kicked in on Thursday after UK interest rates were hiked to 1% from 0.75% and forecast one inflation of 10% by the end of the year.
On the same day, the Luna Foundation Guard made their largest yet Bitcoin-Purchase and added 37,683 bitcoin to their reserve fund.
The nonprofit announced that it has bought more bitcoin with the help of Genesis Trading and Three Arrows Capital, bringing its total reserves to around 80,394 bitcoin.
In the past, the Terra-affiliated foundation’s bitcoin purchases have inspired market confidence and helped LUNA reach new highs. However, given the bleak macroeconomic outlook, LUNA did not respond to the latest update.
From a technical point of view, the token looked like it was in trouble. It recently formed a head and shoulders pattern on its daily chart, anticipating a trend reversal from bullish to bearish.
A sustained close below the neckline of the $77.70 pattern could result in a correction of 35% and possibly take prices below $50.
Source: TradingViewDue to current market conditions, LUNA has been at risk despite LFG’s ongoing Bitcoin spending frenzy.
Still, the bearish outlook could be invalidated if the bulls manage to push prices above the $94 resistance level. Breaking this significant supply wall could encourage sidelined investors to re-enter the market, which could help the token outperform its former peers all-time high to recover.
LUNA reached $119.18 on April 5th. Since then, it is down about 32.8% and was trading just above $80 at press time.
Source: Crypto News Deutsch