- Terra Luna Classic (LUNC) surged 23% on August 10, flipping to a bullish structure but faces potential volatility due to rising bearish signals.
- The sustainability of the rally depends on market conditions, particularly Bitcoin’s performance above $60,000.
Terra Luna Classic (LUNC) made headlines on Saturday, August 10, as it experienced a remarkable 23.3% price surge, bringing renewed attention to the once-beleaguered cryptocurrency. Despite the rally, the question on everyone’s mind is whether this momentum can be sustained or if another wave of volatility is lurking around the corner.
Bullish Flip Amid Uncertain Signals
The recent price action of LUNC has flipped its structure to a bullish stance, with the token moving past the $0.000087 mark. This shift was accompanied by a surge in trading volume, indicating a possible continuation of the upward trend. The Relative Strength Index (RSI) also jumped above the neutral 50, further signaling bullish sentiment in the market.
However, not all indicators point to a smooth ride ahead. The On-Balance Volume (OBV), which tracks the buying and selling pressure, has not shown a significant uptick. This suggests that the buying volume is not as strong as it needs to be for a sustained rally. Additionally, the Directional Movement Index (DMI) reflected a somewhat confused trend, typical of a range-bound market, which could imply uncertainty in LUNC’s future price direction.
Rising Liquidation Levels: A Bearish Threat?
While the bullish momentum is encouraging, there are signs that this rally could face headwinds. The Open Interest (OI) in LUNC skyrocketed from $8 million to $21.1 million, revealing that speculators are keen to capitalize on the recent price movement. However, the OI has since plateaued, and the funding rate has turned more negative, suggesting that traders are becoming cautious.
Moreover, a closer look at the liquidation heatmap reveals a deep pocket of liquidity at the $0.0001 level, which could be swept before a potential bearish reversal. This aligns with the range highs in the technical chart, hinting that a pullback might be imminent. Additionally, despite the price gains, the social volume surrounding LUNC did not see a noticeable increase, indicating a lack of hype that could undermine the bullish momentum.
The Road Ahead: A Crucial Test for Bulls
As LUNC approaches the $0.0008 level, which coincides with mid-range support, the bulls face a critical test. The sustainability of this rally will largely depend on whether Bitcoin (BTC) can maintain its position above the $60,000 mark. If BTC falters, LUNC could experience a wave of long liquidations, leading to increased volatility and potential losses.
While Terra Luna Classic’s recent surge is a positive development, the market remains on edge. Traders should brace for potential turbulence as LUNC navigates through a minefield of bearish signals and uncertain market conditions.
