LUNA to Spike 80%? Here’s What Analysts Think
23 March 2022 - 10:59AM
NEWSBTC
Terra’s LUNA has been trending to the downside in the past few
days, but different indicators show interesting signs and the next
price movements could be fundamental to confirm either an extremely
bullish or a bearish signal. Related Reading | LUNA Sees 17%
Loss In One Week, UST De-Peg Rumors Affect Its Price? What Is
Boiling Up In LUNA’s Weekly Timeframe? When an anonymous trader
used Moving Average Convergence Divergence (MACD) to analyze LUNA’s
next possible movements, the weekly chart showed an interesting
crossover. “Something is up on $LUNA weekly timeframe. Last time
the MACD crossover occured it sent $LUNA from $12 to $106.” A MACD
crossover can give a bullish signal when the MACD (see the blue
line in the chart below) rises above the signal line (see the
yellow line). The opposite crossover would give a bearish signal,
which can also be seen below in previous months as an example.
Another pseudonym trader noted that multiple time frames are
looking good for the digital coin, which they think could be
because a result of “the massive amount of BTC being bought to
help support stable UST or it could be that the whole
market is bubbling up” “1 hour pointing upwards, 4 and 6 hours are
about to print bullish twist above the cloud (max bull signal
in my mind), 12 hour and daily charts look happy enough and
will likely look even nicer as Luna presses to all time highs.”
4,36 Sharpe Ratio The Sharpe Ratio is a risk/return measure highly
used in finance. As per Investopedia, the Ratio describes how much
excess return you receive for the extra volatility you endure for
holding a riskier asset, determining the investment choice that
will deliver the highest returns while considering risk. “Usually,
any Sharpe ratio greater than 1.0 is considered acceptable to good
by investors. A ratio higher than 2.0 is rated as very good. A
ratio of 3.0 or higher is considered excellent. A ratio under 1.0
is considered sub-optimal.” Similarly, a pseudonym crypto analyst
explained during a Youtube Video analyzing LUNA’s share ratio that,
in general, “If you are [the Sharpe ratio] at one, it is a superb
result and it means you are crushing the market, you’re beating
everything out there,” and LUNA Sharpe ratio is 4.36. “It’s off the
charts positive. This thing is just a beast and there’s many people
calling for a $200 Luna in in the near term, but also potentially,
$200 Avalanche, $200 SOL. Either way these three are kind of
winners right now.” However, there are limitations when using
Sharpe Ratio, as it can oversimplify risk and treat all volatility
as the same. Some inflated Sharpe Ratios can turn out to be
misleading if the whole story of the investments was not addressed
correctly. Related Reading | What’s Behind LUNA’s Rally, Could
Its Price Decouple From Bitcoin? Possible Double-Top On the other
hand, there is a possibility of a double top that could be
triggered if the price breaks out from the support level neckline.
This would be extremely bearish for LUNA. There are limitations
when spotting a double top, and “Basing a double top solely on the
formation of two consecutive peaks could lead to a false reading
and cause an early exit from a position,” Investopedia explains.
Because of this reason, this is not a confirmed bearish signal and
the following movements will be vital to identify a possible trend.
A failed double top could shoot up LUNA’s price proving previous
signs right. In a different analyst’s opinion, he noticed LUNA’s
double top but added that it is still showing a bullish mark
structure in the 4-hour timeline. “There’s a lot of high sell
volume coming in, and it looks like there is potentially some type
of head and shoulders pattern playing out. But I would be careful
shorting this one personally just because I think that usually, you
don’t want to short stuff that’s super strong in general.” At the
moment, it looks like the coin could go either way: a huge spike or
a crash around 50%. Regarding Terra’s ecosystem, it is also
important to see how recent developments unfold as they dig into
the unknown territory of bitcoin-backed currencies. At the time of
writing, LUNA is down 2.04% in the day to $93,31.
Avalanche (COIN:AVAXUSD)
Historical Stock Chart
From Mar 2024 to Apr 2024
Avalanche (COIN:AVAXUSD)
Historical Stock Chart
From Apr 2023 to Apr 2024