LUNA Is Not Immune to Crypto Market Weakness
Bitcoin has recently managed to settle below the important support level at $42,600 and is currently trying to settle below $42,000. Not surprisingly, other leading cryptocurrencies are also moving lower, with the exception of Cardano.
The recent trading action shows that leading cryptocurrencies need strong catalysts to move against the pack – general enthusiasm for a project is not sufficient enough to boost a certain coin.
Id note that crypto markets (at least among leading cryptos) continue to drift towards traditional financial market behavior, and traders should monitor this trend closely.
A Pattern of Lower Highs Is a Bearish Sign
The technical picture looks worrisome for the bulls. The main problem is that recent attempts to rebound faced resistance at lower levels, which is a bearish pattern.
This pattern shows that traders want to get out of LUNA and are not ready to wait for the price to reach previous levels. In such environment, we see a pattern of lower highs.
LUNA has recently managed to settle below the 20 EMA near the $80 level and is moving towards the 50 EMA which is located at $74.25. In case LUNA declines below the 50 EMA, it will head towards the support at $68.50. A successful test of this level will open the way to the test of the support at $65.50.
On the upside, the previous support at the 20 EMA will serve as the first resistance level for LUNA. In case LUNA gets back above this level, it will move towards the next resistance at $87.50. A move above $87.50 will push LUNA towards the resistance at the $90 level.
Taking a look at H1 chart, we can see that RSI has recently moved into the oversold territory. However, there is enough room to develop additional downside momentum in the near term.
