The price of the Terra Classic (LUC) token has regained its footing after falling sharply for almost two weeks. For its part, Terra (LUNA) shows no signs of a bullish reversal and evolves inside a bearish configuration.
The UST stablecoin and Terraform Labs cryptocurrency LUNA crashed in May, after a “Death Spiral” situation that caused LUNA’s price to drop nearly 99.99%.
Since then, Do Kwon, the founder of Terraform Labs, has attempted to initiate a revival of his ecosystem with Terra 2.0. He did not, however, take responsibility for the crash of the tokens.
Last week, authorities in South Korea issued an arrest warrant for Do Kwon, claiming the developer was on the run. The latter has himself deny these rumorsbut has not yet indicated where he is.
South Korean prosecutors have also denied Mr. Kwon’s remarks, saying that he refuses to cooperate with the authorities and has no intention of appearing for questioning. As a result, they demanded that the Ministry of Foreign Affairs withdraw his passport.
LUNC price bounces back to support
The price of the LUNC token has been trending lower since its high 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 (in red) as well as the 1.61 area of waves one and three (in white). This area was therefore expected to act as an important local ceiling.
The current decline move led to a low of $0.00024 reached on September 15th. This low, as well as the rebound that followed, validated the support at $0.00027, which is both a horizontal support zone as well as the retracement of the 0.618 Fibonacco support.
Additionally, the daily RSI has bounced off the 50 line (green arrow). Thus, if LUNC does not reach a daily close below this level, it is likely to initiate a significant rebound and potentially resume the bullish movement started on August 15th (in white).
Version 2.0 shows signs of weaknesses
The price of the LUNA token has also fallen sharply 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.
Additionally, the six-hour RSI is below 50, a bearish sign that price action will likely break below support. If LUNA breaks below the current $2.60 support, the next support zone would be at $1.60.
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