Not the Time to Be Selling LUNA, High Probability of Reversal
Updated
Luna was arguably overextended up at $100-90 but has since sold off hard in a very short timespan. The RSI is heavily oversold on shorter-term timeframes and recently just hit oversold on the Daily which hasn't happened before since the May Crash (This is notable). Furthermore, we are resting right above the 200 Daily MA which will be a very strong support level. An aggressive entry at this level to play an initial bounce isn't a bad idea.
Briefly Addressing Fundamental Perspective of Sell-Off
The recent sell-off has been exacerbated by fears from depleting anchor yield reserves and Wonderland recent selloff due to ties to a convicted frauster. From a fundamental perspective, these fears are overblown and unwarranted, but the market sometimes doesn't understand or simply doesn't care when it's scared. If anything, LUNA's stablecoin (UST), has proven its ability to hold its peg; arguably the biggest stress test it's facing in its history. Do Kwon, also implied recently that TFL will be topping up Anchor's yield reserving with a 300 Million donation which should have alleviated much of the yield reserve concerns yet it seems there many are still unaware as I still sell people asking what is going to happen when the Yield Reserve depletes all over social media.
Fundamentally, not much has changed if anything it's stronger than ever. If anything its ecosystem is bigger than it's ever been,
UST has recently just been listed on a number of big exchanges. And the circulating supply of LUNA continues to be burnt on more or less a daily basis.
Briefly Addressing Fundamental Perspective of Sell-Off
The recent sell-off has been exacerbated by fears from depleting anchor yield reserves and Wonderland recent selloff due to ties to a convicted frauster. From a fundamental perspective, these fears are overblown and unwarranted, but the market sometimes doesn't understand or simply doesn't care when it's scared. If anything, LUNA's stablecoin (UST), has proven its ability to hold its peg; arguably the biggest stress test it's facing in its history. Do Kwon, also implied recently that TFL will be topping up Anchor's yield reserving with a 300 Million donation which should have alleviated much of the yield reserve concerns yet it seems there many are still unaware as I still sell people asking what is going to happen when the Yield Reserve depletes all over social media.
Fundamentally, not much has changed if anything it's stronger than ever. If anything its ecosystem is bigger than it's ever been,
UST has recently just been listed on a number of big exchanges. And the circulating supply of LUNA continues to be burnt on more or less a daily basis.Note
Daily Chart with 200 MA support and RSI visually labeledNote
Daily LUNA/BTC RSI is also oversold. The first time it has approached this level since May as well. These are the types of rare scenarios where I would consider going in with an aggressive entry in an attempt to time a reversal. When multiple indicators line up and the fundamentals are still intact.Trade active
If this is a trade, I would take at least a third to half off the table and move your stop up to lock in the profit. You can let the rest ride for a daily bounce, but ~15%+ percent in less than two days is a very strong move. Taking some off the table gives you the flexibility to buy lower if the price retracts.
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