A large bullish candlestick could curb the seven-day bearish intent, confirming an effective resumption of the upward trend. After appreciating by over 2,400% in a year, the tendency of LUNA will drive the price toward new all-time highs.
The price of LUNA, the native cryptocurrency of the Terra network, might reach new all-time highs in the short term. The widespread optimism in the crypto market has driven it up by nearly 30% from the recent low of USD 75.67.
LUNA is trading at around USD 91.16 and has accumulated a 3.1% loss over the last 24 hours. Its trading volume is above USD 1.24 billion, and its market capitalization is about USD 31.88 billion. It occupies 8th place in the cryptocurrency ranking, according to CoinGecko.
One of the best performing cryptocurrencies in 2022 has been precisely LUNA, thanks to the trust the Terra network has gained.
Although the value of LUNA had dropped quickly during the first two weeks of April, the upward trend remained intact. For that reason, the cryptocurrency might have been just going through a corrective period.
As the price is jumping considerably to the upside, there is a confirmation that the bulls are regaining control. The following technical analysis will allow investors to find out what to expect from that crypto asset.
Although LUNA Can Find New Highs, Investors Must Be Cautious
The daily LUNA/USDT chart shows that buyers took over the short-term trend. The price broke through two nearby resistances, and there began to be increasingly high lows.
After achieving demand at USD 78, the cryptocurrency price formed a large bullish candlestick, which could curb the seven-day bearish intent. That great force confirms an effective resumption of the upward trend.
The price maintains the 8-day EMA and 18-day SMA crossed to the downside but breaks through them. The medium-term trend continues as the 200-period SMA remains bullish.
After the price had a recent minor pullback, it looks like a short-term bullish momentum is starting. The next objective is to reach new highs, but investors have to be careful at that point.
Even Though the Trend Is Bullish, It Has Lost Strength
After appreciating by more than 2,400% in a year, the trend of LUNA is bullish, and the rally has extended.
The momentum is undoubtedly bullish and will continue to drive the price toward new all-time highs in the short-medium term.
However, the Relative Strength Index (RSI) indicates a significant bearish divergence with the price chart. Meanwhile, the weekly graph shows higher highs, suggesting that the bulls have run out of steam with the new price records.
The ongoing strongly bullish candlestick makes support above the 8-week EMA and 18-week SMA. For that reason, investors can be confident that the price will reach new highs in the short term.
However, there may not be a rally as big as last year at this point in the rally unless a major pullback occurs first. Before thinking of a significant correction in the short term, the price must lose support at USD 77. However, a drop in the value of LUNA would not be a concern if it remains at the USD 50 level.
By Alexander Salazar
