LUNC drops 37% in six days, structure still bearish – patience required

Terra Classic [LUNC] has now logged five straight red candles on the price charts, which is about as fun as it sounds. Since the 1st of June, it has receded by 30.82%. CoinMarketCap data showed a 20% increase in daily trading volume, though that bump was not enough to lift trading volume above the 20-day moving average. Despite the recent slump, LUNC retained a bullish bias on the higher timeframes. Here's why there is a decent chance that buying the altcoin now could yield reasonable returns in the coming weeks.

Towards the end of May, AMBCrypto reported that the higher timeframe structure was bullish. The expectation was that the $0.000087 resistance zone would be breached. Instead, around that time, Bitcoin began sinking below $75k, shifting its 4-hour trend bearishly. LUNC bulls faced rejection at the aforementioned resistance and subsequently lost control of the $0.000072 support as well. Yet, the higher timeframe picture remains bullish for LUNC — the chart stubbornly refusing to read the room.

The swing structure hinges on the $0.000035 and $0.000123 levels. At the time of writing, the 78.6% retracement level at $0.000054 has served as a demand zone. The CMF remained in neutral territory, indicating that selling pressure was not running out of hand. The OBV agreed with this finding, having only posted a modest dip over the past month.

The momentum was more bearish, as shown by the MACD, which has sunk below the zero line. The defense of the golden pocket in recent hours of trading was encouraging, but not an automatic buy signal — charts rarely do free handouts. Bullish traders need to wait for a clear reversal before buying. The 1-hour chart has not yet shifted its structure bullishly.

As things stand, a move back above $0.0000686 is needed to show that bulls are back in control. This area marked the local highs that need to be breached to bring a structural shift. Such an H1 shift will also make it easier for swing traders, giving them added clarity on buyer strength and where the invalidation of the bullish setup lies.