- LUNA’s price has fallen 23% since July 20, indicating more losses around the corner.
- Investors can expect at least another 12% decline this week as the bears take control.
- A daily candlestick close below $1.46 without a quick recovery will invalidate the chances of a recovery.
LUNA price shows that it is ready to repeat the fractal that was spotted almost two weeks ago. If such a development occurs, investors should be aware that further corrections are on the horizon.
LUNA price needs to exhaust liquidity on the downside
The LUNA price produced a fractal that had two parts; the first leg was a liquidity run below a previously formed swing low, and the second leg was a rally.
The June 8 low at $1.94 was swept away as the price of LUNA fell below on June 18 to collect liquidity. This was followed by a buildup of bullish momentum that sent the altcoin up 73% over the next week or so.
This rally was exhausted after the altcoin created a double top.
The second time this pattern was repeated was on July 13, when the price of LUNA fell below the June 18 low at $1.60. After this liquidity run, the altcoin triggered another surge that pushed Terra up 50%.
Interestingly, this rally also faced exhaustion after producing a double top at $2.20.
Since creating a local high, the price of LUNA has fallen 25% to its current level of $1.64. If the fractal is still in play, Terra is likely to drop at least 12% before sweeping the July 13 low at $1.46. This development, according to the fractal, should trigger a bullish move.
In such a case, market participants can expect a 32% move to $1.94.
LUNA/USDT 4-Hour Chart
While things look bearish in the short term, LUNA price is positioning itself for a bullish move. If the sweep from the July 13 low at $1.46 fails to recover quickly, it will invalidate the fractal.
In such an event, the price of LUNA could crash to the psychological level of $1 before attempting another recovery rally.
