- Terra has fallen over the past 24 hours amid increasing macroeconomic uncertainty.
- LUNA has been affected by the latest market slump despite the Luna Foundation Guard announcing a $1.5 billion bitcoin purchase.
- If LUNA breaks the support level at $77.70, it may experience a severe crash.
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Terra’s LUNA is approaching a crucial support level that could determine its future price movements. With the macroeconomic outlook worsening, LUNA faces the risk of a sharp downturn.
LUNA TERRA IN VITAL SUPPORT
Terra is at risk of deflation as market participants grow increasingly concerned about the global economic outlook.
LUNA’s tier 1 token LUNA has bounced more than 10% over the past 24 hours, dropping from a high of $87.80 to $78.80. The bearish impulse started on Thursday after the Bank of England raised interest rates in the UK from 0.75% to 1% and forecast 10% inflation by the end of the year. On the same day, Luna Foundation Guard made its largest Bitcoin purchase to date, adding 37,683 Bitcoin to its reserve fund.
The non-profit organization announced that it has bought more bitcoin with the help of Genesis Trading and Three Arrows Capital, bringing its total reserves to about 80,394 bitcoin. In the past, bitcoin purchases from the Terra-linked Terra Foundation cemented confidence in the market and helped LUNA surge to new heights. However, amid a bleak macroeconomic outlook, LUNA failed to respond to the latest update.
From a technical perspective, the token appears to be in trouble. It recently formed a head and shoulders formation on the daily chart, anticipating a reversal of the bullish to bearish trend. A sustained close below the neckline of the pattern at $77.70 could lead to a 35% retracement, which could take prices below $50.
Given the current market conditions, LUNA is at risk despite LFG’s ongoing Bitcoin spending spree.
However, the pessimistic view could be negated if the bulls manage to push prices beyond the $94 resistance levels. Breaking through this huge supply wall could encourage marginal investors to return to the market, which could help the coin to reconsider its previous all-time high. LUNA was priced at $119.18 on April 5th. It has since fallen 32.8%, trading just above $80 at press time.
Disclosure: At the time of writing, the author of this article is owned by BTC and ETH.