Terra (LUNA) Visits $64 While the Broader Market Struggles
Key Insights:
$1bn LUNA token sale drives LUNA to a February high of $64.97.
The private token sale was reportedly the largest in crypto history.
Another breakout day ahead would bring $70 into play.
It was a choppy day for the crypto market on Wednesday. The broader crypto market is under pressure this week due to news updates on Russia and Ukraine.
Despite the market angst that left the rest of the top 10 crypto majors in the red, Terra (LUNA) surged by 8.87% to end the day at $59.63. Late in the session, LUNA struck a February high of $64.97 before easing back to sub-$60 levels.
Stablecoin News Drivers LUNA to $64
On Wednesday, news hit the wires of Luna Foundation Guard (LFG) raising $1bn in a private token sale. The $1bn LUNA token sale was reportedly the largest in history. Importantly the LFG created a Bitcoin (BTC) denominated reserve for Terra’s largest stablecoin, TerraUST (UST).
The $1bn BTC reserve will reportedly be locked up for 4-years and will ensure the 1:1 peg with the USD in the event of UST redemption.
For LUNA, the BTC reserve should deliver improved stability and drive demand for UST. Minting 1 UST burns $1 of LUNA. The reduced supply of LUNA then leads to a LUNA price increase should UST demand hold.
LUNA Price Action
At the time of writing, LUNA was up by 0.49% to $59.9.
Technical Indicators
LUNA will need to avoid the $59.8 pivot to make a run on the First Major Resistance Level at $64.8 and Wednesday’s high $64.97. The broader crypto market would need to support a return to $64.
Another extended rally would bring the Second Major Resistance Level at $70.0 into play. The Third Major Resistance Level sits at $80.4.
A fall through the pivot would bring the First Major Support Level at $54.5 into play. In the case of an extended sell-off, LUNA could test the Second Major Support Level at $49.5 before any recovery.
Looking at the EMAs and the 4-hourly candlestick chart (above), it is a less bearish signal. LUNA continues to hold above the 200-day EMA currently at $57.2. A bullish cross of the 50-day EMA through the 100-day EMA would bring $70 levels into play.
A further narrowing of the 100-day EMA on the 200-day EMA would also support a run on $70.
LUNA will need to avoid a fall through the 200-day EMA.
This article was originally posted on FX Empire