The market tends to run on momentum, but it seems as if Terra Luna has been one of the outliers lately, meaning that we are simply grinding higher.
The Terra Luna market pulled back a bit on Tuesday as the $95 level has offered a little bit of resistance. It should be noted that the $95 level is the beginning of resistance extending to the $105 level. Because of this, I think the market is likely to continue to struggle to go higher in the short term, but it certainly looks as if we are trying to build up enough momentum to break out. After all, you could make a little bit of an argument that we are either trying to form an ascending triangle, or perhaps even a rising wedge, which would argue for the other direction.
Keep in mind that crypto has had a little bit of a positive day on Tuesday in the major coins, mainly Bitcoin and Ethereum. Because of this, the market looks as if it is ready to go higher on the whole, and the fact that Terra Luna struggled may not be a good sign. However, I would not read too much into it simply because of where we were at the moment. That being said, if we were to break down below the hammer from last week, then I think we could fall apart and go looking towards the $80 level, possibly even the 50-day EMA.
The markets, in general, are trying to find some type of reason to rally, so if Bitcoin can finally break above the crucial $45,000 level, there will probably be a bit of a “knock-on effect” in other markets such as this one. While I do not necessarily think that Bitcoin has to break out for this one to go higher, it certainly would not hurt the situation. The market tends to run on momentum, but it seems as if Terra Luna has been one of the outliers lately, meaning that we are simply grinding higher.
If we do break out above the $105 level, then Terra Luna may go looking towards the $120 level over the longer term, perhaps even higher than that. I think the next couple of trading sessions could give us quite a bit of information as to where we are going next. It is worth noting that the range for the session on Tuesday which smaller than the Monday one, so the buyers may be still very much in control.