Terra Luna (LUNA) gained significant momentum over the past three days, reaching a high of $0.9 with a 30% increase in the last 24 hours before retracing to $0.7382. This rise was associated with a strategic investment move aiming for a resurgence and a noticeable growth in the algorithmic stablecoin TeraClassicUSD (USTC). The surge in the altcoin’s price could signal the beginning of a strong uptrend, as it breaks through the resistance trendline of a long-term falling wedge formation.
The LUNA price had been in a consistent downtrend within a falling wedge formation defined by two dynamic trendlines acting as resistance and support throughout the last year. However, the break above the formation’s resistance trendline suggests that the downtrend momentum may have exhausted or even ended. After several rejection candles on the upper trendline of the formation, the altcoin price has now successfully breached this barrier.
The recent increase and breakout appear to be a result of a strategy executed by Terra Classic Lab’s treasury, which involved purchasing approximately 25.6 million USTCs at an average price of $0.021, amounting to a total of around $500,000. This action contributes to the growth of the stablecoin.
Currently, LUNA is trading at $0.7382, and if buyers manage to sustain the price above the breached resistance line, a recovery rally could continue, potentially targeting around $2.54 and $3 based on the channel formation.
On the daily timeframe chart, a rejection candle with a long wick attached to the breakout candle can be seen, indicating that buyers are struggling to keep the price above the resistance line. If a news-driven rally fails to sustain this breakout, the bullish thesis mentioned earlier could be invalidated, potentially leading to a bull trap and increasing selling pressure that could drive the price down to $0.55.