This Will Be the Bullish Test for Terra LUNA and Avalanche (AVAX)
Avalanche coin and Terra LUNA have suffered some massive losses in the last two months, even th0ugh they were holding well until late December, while most of the crypto market had been retreating lower since early November. Luna coin and AVAX have lost more than half their value, but they have now found support at the last moving average on the daily chart. However, they are facing resistance above that, so this will be the test for them, as to whether they are going to resume the larger bullish trend or remain bearish.
Terra LUNA Analysis – The 200 SMA Holds as Support
As mentioned above, LUNA coin has been among the most bullish cryptocurrencies in recent months, having continued to push higher and make new highs until late December, despite most cryptocurrencies turning bearish for two months. But the retreat accelerated in the second half of January, as the Wonderland project came under some pressure. Terra LUNA is not directly connected with this project, but it is linked through Magic Internet Money (MIM), which is used by Abracadabra, which, in turn, is built on the Terra blockchain. Wonderland’s treasury manager is Michael Patryn, who is not a very trustworthy name in the industry, so this is weighing on the sentiment.
Terra’s total value locked (TVL) has declined by 25%, but it still remains the highest behind Ethereum’s TVL, however, the decline in LUNA/USD stopped at the 200 SMA (purple) on the daily chart. We saw a bounce off this moving average earlier this week, before the climb stopped at the previous support/resistance level below $55. So, if LUNA pushes above this level, the bullish trend will be back on. If not, we will see a retest of the 200 SMA, where we might open a buy signal, supposing it holds.
Avalanche Daily Chart Analysis – The 200 SMA Pushing AVAX Up
Now Avalanche faces the next support as resistance
Avalanche increased from around $10 to $147 from August until late December. Late that month we saw a bearish reversal, and the first support was broken, but the second one, below $80, held the decline, with some help from the 100 daily SMA (green) as well.
Then the decline resumed again in January and that support level was broken, although the last major support around $55 – which was the high from back in May 2021 – held, this time helped by the 200 daily SMA (purple), which is pushing the price higher. But, now AVAX is facing the previous support below $80, as well as the 20 daily SMA (gray).
Avalanche is another interesting crypto blockchain, with three instead of one, each taking care of a different function, thus improving scalability and speed. More than 150 projects run on Avalanche, which means that the AVAX coin will resume the uptrend at some point, but let’s wait and see if this is it!
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