Today, we’re taking a quick technical look at Solana (SOL) and Terra (LUNA). These top tier layer-1 blockchain tokens are in consolidation mode, so they’re definitely ones to watch in case bitcoin’s move to new all-time highs drags the rest of the crypto space with it.
First up is Solana (SOL), which we can see on the four hour chart above has continued to tighten up in price action after its massive Summer rally to 216.00 before pulling back. The market seems to have settled into the 140.00 – 170.00 range this month, with the 155.00 handle turning into the main focal point of a symmetrical triangle formation.
With bitcoin making new all-time highs, it’s possible we could see the rest of the crypto space follow suit, because as we’ve seen in the past, bitcoin is the king of crypto, and where it goes everyone follows.
So, if alt coins do follow BTC higher, we’ll be on the look out for an upside break of the falling ‘highs’ pattern on the chart above. A break there and the 170.00 resistance area may draw in technical buyers, as well as a new rush of investors to the crypto space that the bitcoin headlines may attract.
Much like Solana above, it was a choppy market for LUNA traders through September and October after the Summer hype died off in these Ethereum alternatives. For LUNA, after double topping out just under the 50.00 handle, it fell back to the incredibly strong area of interest around 35.00, where we’ve see both support and resistance in the past. LUNA/USD has been consolidating tightly here for the past week, so the question is now whether or not we’ll see an upside break once again?
Well, besides the possibility of bitcoin pulling up the crypto space as it enters a new era in price, LUNA actually has its own potential bull catalyst in the works. This week, Wormhole is adding the Terra network to its bridge, allowing Terra assets like Terra stablecoins and LUNA to be easily ported over to other chains like Ethereum, Binance Smart Chain, and Solana. This could be a big deal for LUNA as this development could exponentially increase the demand and minting of UST (Terra’s main Dollar pegged stablecoin), which in turn burns LUNA and effectively reducing the circulating supply.
If this scenario plays out, we could see LUNA break higher from that 35.00 handle once again, and we’ll be on the look out for a break above 40.00 for a potential position. A sustained break there could draw in technical and fundamental buyers that see the next leg in the longer-term uptrend about to form.
What do you all think? Are SOL/USD and LUNA/USD set to break higher? Let me know in the comments section below!