Terra (LUNA) Eyes Return to $90 After a Post-$100 Dip to $70

Key Insights:

• LUNA hit a Tuesday high of $86.68 before ending the day at $85.48.
• Market sentiment towards a Bitcoin reserve for TerraUSD remains LUNA positive.
• However, downside risks of the White House Executive Order on crypto regulation linger. 

It was a particularly bullish day for LUNA on Tuesday.

Recovering from an early morning low of $79.05, LUNA surged to a late intraday high of $86.68 before easing back.

Falling short of $90, LUNA ended the day up by 9.65% to $85.48. On Monday, LUNA fell by 1.57%.

The bullish day brings the current month’s high of $96.63 and $100 into play. In December, LUNA struck an ATH $103.36.

Stablecoin Demand Keeps December’s ATH $103 in View

Late February’s Luna Foundation Guard private sale remains the main driver near-term.

In February, the Luna Foundation Guard (LFG) raised $1bn in a private token sale. The LFG created a Bitcoin (BTC) denominated reserve for Terra’s largest stablecoin, TerraUSD (UST).

Investors have bought into using the Bitcoin reserve to reduce volatility. However, broader crypto market sentiment will need to improve for LUNA to target December’s ATH.

Downside risks include Biden’s Executive Order and the ongoing threat that stablecoins face from lawmakers on Capitol Hill.

LUNA Price Action

At the time of writing, LUNA was up by 3.04% to $88.08.

Technical Indicators

LUNA will need to avoid the day’s $83.74 pivot to make a run on the First Major Resistance Level at $88.40. LUNA would need the broader crypto market to support a breakout from this morning’s high of $88.16.

Another extended rally would test resistance at $90 and the Second Major Resistance Level at $91.36. The Third Major Resistance Level sits at $99.00.

A fall through the pivot would bring the First Major Support Level at $80.78 into play. Barring an extended sell-off, LUNA should steer clear of Tuesday’s low of $77.38. The Second Major Support Level sits at $76.11.

Looking at the EMAs and the 4-hourly candlestick chart (below), it is a bullish signal. LUNA continues to hold above the 50-day EMA currently at $82.4.

The 50-day EMA has pulled away from the 100-day EMA, delivering support this morning. The 100-day EMA has also pulled away from the 200-day EMA, bringing $90 levels into play.

Avoiding the 50-day EMA would support another breakout.