Terra Luna’s price has crashed to a key support level as its futures open interest plunged, a sign of weak demand. LUNA token fell to a low of $0.2610, its lowest swing since August last year.
Its market cap has dropped by almost 70% from its highest level in December, reaching $185 million.
So, is it safe to buy the LUNA 2.0 dip?
Luna Price Analysis: Double-Bottom Forms
The Terra Luna price bottomed at $0.2513, a notable level since it was the lowest level in August last year. It formed a double-bottom pattern whose neckline is at $0.7970, its highest swing in December last year. A double-bottom is a highly popular bullish reversal sign.
The Relative Strength Index (RSI), which measures an asset’s momentum, has also moved from the oversold level of 28 to the current 37 and is pointing upwards.
Further, the two lines of the Percentage Price Oscillator (PPO) are about to form a bullish crossover pattern. The PPO is a revised version of the MACD indicator and is usually used to show divergences and convergences.
The last time that the Terra price formed this pattern was in February 2024, and the token jumped by 50% after that.
Therefore, the Terra price is likely to rebound and possibly retest the neckline at $0.7970, up 206% from the current level.
Potential Catalysts for Terra Coin
For starters, Terra is a blockchain network that collapsed in May 2022 as the Terra USD stablecoin lost its peg.
Following that collapse, Do Kwon and his team launched Terra 2.0 to continue with its operations. The community took over Terra Luna Classic (LUNC), which continues to operate to this day.
Terra 2.0 operations ended in 2024 when Terraform Labs filed for bankruptcy. Still, the LUNA price continues to trade because exchanges like Crypto.com, Binance, HTX, OKX, and Bybit offer it.
The most likely reason the token still has holders is that true believers believe that it will bounce back. There are also hopes that the stablecoin will regain its peg over time.
Further, traders hope that the Terra ecosystem will be revived, while others view it as a memecoin. Another reason is that its dilution will end in 2025 when all 1.18 billion tokens are unlocked.
Read more: LUNC Price Prediction: What Next for Terra Luna Classic?
