- LUNA 2.0 The price tumbled 88% shortly after hitting an all-time high of $30 on Saturday just after launch.
- Despite the recent drop, Terra (LUNA) seems to have an 185% chance of recovery due to the average return.
- A break of the support level at $3.50 will create a lower low and invalidate the bullish argument.
LUNA 2.0 pricecontinues to consolidate below the midpoint of the newly formed trading range after the airdrop from last Saturday. Traders are advised to be patient and wait for the price direction to develop before opening new positions.
Terra Ecosystem Recovery Plan
The first talks were actually quite hectic and the rescue plan with LUNA 2.0 was accepted very quickly and started on May 28. The LUNA name was changed to Luna Classic and the new network was switched. New tokens were airdropped to old coin holders, and the distribution was as follows:
- 30% as a community pool
- 35% pre-attack for LUNA owners
- 10% for pre-attack AUST holders
- 10% to LUNA owners after attack
While eligible holders receive 30% of the new LUNA 2.0 tokens via airdrop, an interesting phrase in the offer seems to have escaped the notice of many investors.
“All locked or qualifying tokens are staked in formation and must be unlinked to become liquid.”
While this created a momentary uncertainty among investors, founder Do Kwon cleared the doubt by tweeting.
Its in the governance proposal that launched the new network, which you obviously didn’t read
Cheers, fud harder pic.twitter.com/YqZrE3gyjz
— Do Kwon 🌕 (@stablekwon) May 29, 2022
So far, things are not looking good for the LUNA 2.0 price as it has lost 88% from its all-time high of $30, but the future looks interesting and promising.
LUNA 2.0 Price Ready for Reversal
LUNA price surged 5,900% after a successful restart on Saturday, May 28, and hit an all-time high of $30. This rise, while impressive, was short-lived and led to an 88% collapse, which made the drop to the $3.50 levels visible.
A quick rally after this move created a swing high at $10.22, which is essentially the range the LUNA 2.0 price has been in for the past two days. As this spiral continues, there is a good chance for the Terra bulls to come together and start a major rally.
The reason for this rise is that assets tend to return to the average after a big move (in either direction). As far as LUNA price is concerned, such an average reversal is likely to be higher given the 88% slump witnessed recently, and since the drop was so sharp, the recovery is likely to be equally sharp and happen over the next few days.
A recovery above the 50% retracement level at $6.86 will be the first confirmation of this bullish move. Following this, LUNA price could move towards a range higher at $10.22. However, for the average reversal to occur, Terra needs to retrace to the midpoint of the 88% collapse, which gives us a theoretical target of $16.75.
Assuming the uptrend does occur, that would mean a gain of 185% from the current position and is likely where bullish is capped for the altcoin. However, given the great uncertainty in the market due to Bitcoin’s consolidation, a move to its all-time high of $30 seems unlikely.
While the average reversal theory is technically plausible, ultimately the direction of Bitcoin price action will be decisive. If major selling pressure emerges, the bears could push the price down to the $3.50 level, producing a new low and triggering further declines.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.