The price of the Terra Classic token (LUC) has regained its footing after falling sharply for almost two weeks. For its part, Terra (LUNA) shows no signs of bullish reversal and is evolving within a bearish setup.
Terraform Labs’ UST stablecoin and LUNA cryptocurrency crashed in May, after a “Death Spiral” situation caused the price of LUNA to drop by almost 99.99%.
Since then, Do Kwon, the founder of Terraform Labs, has tried to start a renaissance of his ecosystem with Terra 2.0. However, he did not take responsibility for the drop in chips.
South Korean prosecutors have also denied Mr. Kwon’s comments, indicating that the latter refuses to cooperate with the authorities and has no intention of presenting himself for questioning. As a result, they demanded that the Ministry of Foreign Affairs withdraw his passport.
LUNC price returns to support
The price of the token MON it has been trending down since its peak of $0.00059 on September 8. This top was at the confluence of important Fibonacci support levels, created by the 4.2 – 4.618 extensions of the initial move (shown in red) as well as the 1.61 area of waves one and three (shown in white). Therefore, this area was expected to act as an important local ceiling.
The current decline move led to a low of $0.00024 made on Sep 15. This low, as well as the bounce that followed, validated the support at $0.00027, which is both a horizontal support zone and the 0.618 Fibonacco support retracement.
Also, the daily RSI has bounced off the 50 line (green arrow). Therefore, if LUNC fails to make a daily close below this level, it is likely to initiate a significant bounce and potentially resume the rally started on Aug 15 (blank).
Version 2.0 shows signs of weakness
The price of the LUNA token has also fallen considerably since September 9, falling 66% so far. However, unlike LUNC, it does not provide any bullish signals. On the contrary, the price has created several consecutive lower highs, a sign of weakness that supports the continuation of the downward movement.
Also, the 6-hour RSI is below 50, a bearish sign that price action is likely to break below support. If LUNA breaks below the current support at $2.60, the next support zone would be at $1.60.
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