- Terra Classic is facing significant bearish pressure, risking a drop below the $0.00006 support level due to intensified market sell-offs.
- A descending triangle pattern indicates a potential 22% decline, although buyer defense at lower levels offers a glimmer of hope.
The descending triangle pattern is setting the Terra Classic (LUNC) price for an extended downfall. As the cryptocurrency market faces increased supply pressure, exacerbated by Bitcoin’s correction, LUNC may continue its downward trend until it breaks the downsloping trend line.
Bearish Momentum and Market Sell-off
The recent market sell-off has hit Terra Classic hard. This week, the LUNC price saw an 11% drop in intraday trading volume, with transactions totaling $14.6 million. The pressure intensified due to significant Bitcoin liquidations from the Mt. Gox exchange and the German government, pushing Bitcoin to a 4-month low of $53,550. As bearish sentiment spread to altcoins, Terra Classic fell below its 7-month support level, setting the stage for further declines.
In the daily timeframe analysis, Terra Classic has completed a bearish continuation pattern known as a descending triangle. This technical setup, often found in established downtrends, signals accumulating bearish momentum. The LUNC coin’s downtrend began in early March, reversing from $0.00025 and tumbling 73.6% to its current trading price of $0.0000673. Its market cap has dropped to $368.7 billion.
Amid this downtrend, Terra Classic recently broke below its 7-month neckline, creating another resistance level that hampers price recovery. According to Coinglass, LUNC long position holders experienced $400 million in liquidations over the last 48 hours, highlighting the intensified selling pressure.
Capital Outflows and Future Prospects
The broader cryptocurrency market has seen significant capital outflows recently. Renowned trader Ali (@ali_charts) highlighted in a tweet that the market’s realized net position change has plummeted from over $110 billion in March to just $20 billion today. This dramatic decline underscores the ongoing capital flight from the crypto sector, contributing to the sustained selling pressure.
Capital continues to exit the #crypto market, dropping from over $110 billion in March to $20 billion today! pic.twitter.com/GhXplfgGlA
— Ali (@ali_charts) July 5, 2024
If this trend continues, the LUNC price could plunge another 22%, hitting the August 2023 low of $0.000052. However, there is a glimmer of hope. The daily chart shows a long-tail rejection, indicating that buyers are defending the lower price level. For a more optimistic outlook, buyers need to break through the resistance trendline to regain control.
Terra Classic faces significant bearish pressure amid a broader market sell-off. While the descending triangle pattern suggests further declines, the market dynamics and buyer defense at lower levels provide a nuanced outlook. Investors should watch for a breakout from the resistance trendline for any signs of a potential recovery.
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