LUNA offers 60% upside and 50% downside

2022年2月3日

Hear me out. LUNA is at an inflection point and with the crypto market not showing any signs of strength right now, it's hard to be a bull. One must be open to 2 opposing scenarios and have a plan for both directions.

The Bull case:
- LUNA is holding its 200 day MA.
- We have a nice 5 wave pattern on the downside.
- We've made a 786 retracement (and more) off the move from $35 to the ATH.
- Upcoming MACD crossover on the Daily
- RSI oversold on the Daily
- Willy oversold on the Daily
- Even if you are a Bear (I am a Bear), a relief rally based on pure technicals is most likely.

The Bear case:
- BTC has room for downside - it can still go as low as 20k support which many are calling for.
- LUNA has had FUD news as of late (I tend to be a chart purist but you can't ignore this one) - there are some major concerns around the staking and returns for LUNA / TERRA in the down market. This could lead to a panic selloff.
- We haven't quite touched the 618 retracement, and the chart leaves much room to what would be a major support level around $22.
- The 786 retracement lines up with the $22 range noted.
- The 1.618 extension of the bear move from the top lines up on top of that 786 retracement. One cannot ignore confluence.

My hypothesis:
- We have a chance to rally to $90, before correcting all the way to $22. Be very careful out there!!

What am I doing?:
- I've entered a LUNA long, which I already sold and made profit on, and I'm currently filling up another LUNA long. STOP IS TIGHT! Just under the recent low below $46.50. I am trading on margin so cannot afford to put my stop below the low of $43. That's just personal discretion and being willing to re assess if I should re-enter if the stop hits. Taking profits earlier helps me a lot if a stop hits to minimize or even eliminate my downside risk.