Assess the leverage of LUNA bulls to break out of this block of orders

Warning: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

Terra has had a solid run on the charts in recent weeks. In early March, news emerged that $30 billion of LUNA was staked across various platforms, compared to $27 billion for Ether. This coincided with a strong rally in the charts, backed by genuine demand.

Over the past few days, this bullish momentum has waned and the price has traded in a range. Is a breakout imminent or are the bears sharpening their weapons for battle once again?

LUNA – 1H

In white is a range of $85.1 to $94.8, the one that LUNA has been trading in for most of the past week. This range, despite the gap at $83, is significant due to the importance of the middle level at $90 (white dotted line). This level has acted as support and resistance consistently over the past week.

Price action indicated that on March 14, a test of the range highs was followed by a bearish engulfing candle. This indicated a bearish order block at the range tops (red box) and an area where sellers are likely to be strong again.

A rejection here would likely see LUNA return to the lows of the range in search of liquidity.

Reasoning

LUNA in a short-term supply zone, could it return to the low end?

Source: LUNA/USDT on TradingView

The indicators also seemed to favor a downward move. The RSI, although it showed strong bullish momentum, set equal highs while the price made higher highs. This indicated the possibility that the momentum may have run out of steam even as the price rose.

The Stochastic RSI formed a bearish cross in the overbought territory while the OBV failed to record a new high last week.

This could all change in the next few hours if LUNA can break above the $94.5 zone and retest it on demand. However, as things stand at press time, a move back towards $90 and $85 seemed likely.

Conclusion

The indicators pointed to the possibility of a move towards the lows of its range for LUNA. The price action showed a clear order block at $94, which could decide the direction of the next move for the altcoin.