- LUNA price sliced through the previous swing low at $1.60, but recovered quickly hinting at a potential scalp setup.
- Investors can expect Terra bulls to trigger a 15% run-up if certain conditions are met.
- A four-hour candlestick close below $1.60 will invalidate this bullish outlook.
LUNA price shows an interesting outlook, which suggests an opportunity for traders to scalp the next move. However, certain conditions need to be met for Terra bulls to trigger a run-up.
LUNA price has dropped 40% after retesting a declining trend line for the third time. This move pushed the altcoin to sweep below the June 18 swing low at $1.60 to produce a lower low at $1.46.
There are two things to note here – the pullback collected liquidity resting below the June 18 swing low but managed to produce a four-hour candlestick close above it. This development indicates that the buyers are in control.
Therefore, traders can take advantage of the next move, which is likely going to be a swift recovery above the $1.94 hurdle, followed by a bounce. In addition to the first trigger, the Relative Strength Index (RSI) has dipped below 30 – the oversold zone – and is recovering.
The last time a series of such events occurred was on June 18 and it caused LUNA price to rally 73% in under ten days.
Since the aforementioned triggers are seen again, investors can expect LUNA price to trigger a quick 15% run-up to retest the declining trend line at roughly $2.23.
In a highly bullish case, this move could extend the rally to $2.80 to collect the liquidity resting above equal highs. Such a rally would constitute a 45% ascent for LUNA price from the $1.94 level.
LUNA/USDT 4-hour chart
While things might be starting to warm up for Terra bulls, investors need to pay close attention to LUNA price. A four-hour candlestick close below $1.60 will indicate a bearish regime and invalidate this bullish outlook. In such a case, LUNA price might slide lower to find stable support levels.