Terra (LUNA) Eyes $70 After Thursday’s Breakout

Key Insights:

• Stablecoin demand supported a bullish day for LUNA
• Wednesday’s $1bn LUNA private sale continued to deliver further upside
• $70 is the next target price

It was another choppy day for the crypto market on Thursday. The broader crypto market was under pressure following news of Russia’s invasion of Ukraine. Support kicked in late in the day as the markets responded favorably to fresh sanctions on Russia.

Negative sentiment early in the day had seen Terra (LUNA) slide to a day low of $50.4 before surging to a day high of $66.03. Easing back from $66 levels, LUNA ended the day up by 9.44% to $65.26.

Stablecoin News Brings $70 Into Sight

On Wednesday, news hit the wires of Luna Foundation Guard (LFG) raising $1bn in a private token sale. The LFG created a Bitcoin (BTC) denominated reserve for Terra’s largest stablecoin, TerraUST (UST). Locked up for 4-years, the BTC reserve will ensure the 1:1 peg with the USD in the event of a UST redemption.

An anticipated rise in demand for UST would lead to an increased burn of LUNA, which would be LUNA positive. Adding to the upside on Thursday was a reported increase in demand for stablecoins resulting from Russia’s invasion of Ukraine. While Bitcoin (BTC) and other altcoins have struggled, stablecoins have held their ground.

LUNA Price Action

At the time of writing, LUNA was down by 1.04% to $64.58.

Technical Indicators

LUNA will need to avoid the $60.56 pivot to make a run on the First Major Resistance Level at $71. The broader crypto market would need to support a breakout from Thursday’s high $66.03.

Another extended rally would bring the Second Major Resistance Level at $76 into play. The Third Major Resistance Level sits at $92.

A fall through the pivot would bring the First Major Support Level at $55 into play. In the case of an extended sell-off, LUNA could test support at $50. The Second Major Support Level sits at $45.

Looking at the EMAs and the 4-hourly candlestick chart (above), it is a bullish signal. LUNA continues to hold above the 200-day EMA currently at $57.3. An overnight bullish cross of the 50-day EMA through the 100-day EMA $70 brings levels into play.

A further narrowing of the 100-day EMA on the 200-day EMA would also support a run on $70.

LUNA will need to avoid a fall through to sub-$60 and the 200-day EMA.