Terra Classic: LUNC is up 25% in a day, but should you buy if got a pullback?

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Terra Classic: LUNC is up 25% in a day, but should you buy if got a pullback?

Disclaimer:  The following analysis is the sole opinion of the writer and should not be considered investment advice.

  • Earning <100% in a week
  • The possibility of a pullback, but how deep will it be?
  • Bitcoin Trends to Early Profit May Prove to be Valuable

Terra Classic (LUNC) has rallied almost 100% from low to high over the past seven days. Strong buying pressure is continuing at press time, and any drop into support is likely to create a low risk and high reward buying opportunity. And yet, deep recoil is also possible with such powerful bombs. Therefore, traders can consider a relatively tight stop loss on their LUNC positions.

Fibonaci chart LUNC

Source: LUNC/BUSD on TradingView

Looking at a higher timeframe chart such as the 4-hour chart shows a bullish market structure. Therefore, a lower timeframe trader might be bullish and looking for buying opportunities. The Fibonacci levels (white) suggest that $0.00036 could be a short-term resistance, while the $0.00033 level could act as support.

A deeper pullback to $0.0003 (23.6% retracement) is also possible. The RSI is strongly increasing and is also in the overbought zone. OBV has also increased rapidly in recent days. In terms of risk-reward, it makes more sense to wait for a bounce back to the aforementioned support zones before buying Terra Classic.

Short positions were blown out of the water

Source: Coinglass

LUNC is up almost 100% on the price chart in the past week. This, after Binance announced a write mechanism that will burn all trading fees paid for it on LUNC spot and margin trading pairs. Coinglass's liquidation chart shows that a large amount of short positions were eliminated over the past week. This has also fueled the rally higher. Hence, a pullback is possible. It is scalable over $0.00029.

The retrace at $0.00033 and $0.0003 can be used to enter long positions on LUNC. The strong uptrend may continue for the next few days. To the north, the 61.8% extension at $0.00042 could be another upside target.

 


Oct 02, 2022

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