In December, Terra luna dropped by 22 percent, continuing a long-term bearish trend that had seen its value plummet by a third in the previous month. However, Luna has started strongly this year, recording over a 6 percent price surge in the first three days. Today, with prices already up by a percentage point, it is looking highly likely that we will continue to see Terra Luna extend the bullish trend of the past few trading sessions.
Is Terra Luna Poised for Recovery in 2023?
Despite starting strongly in the first three trading sessions of the year, there are still doubts on whether we will see Terra Luna make a comeback this year. One of the reasons for the pessimism is the current bear market in the cryptocurrency industry. The industry-wide bear market will continue impacting the chances of a Terra Luna price recovery due to the significant correlation it has with the industry trends.
Investors have also become more cautious with their investments following the collapse of FTX and the mid-May collapse of the original Luna project, which was renamed Classic. Therefore, even with the slim chance that the industry-wide trends will reverse to the upside, there is a high likelihood that the bullish trend will not extend to include Terra Luna. This will mean a continued price drop in the first quarter of 2023 and possibly throughout the year.
Looking at the chart below, it is also clear that technical analysis indicators are also showing a downward lean. The Williams Alligator indicator, for instance, continues to show that the current trend is aggressive to the downside. The price action is also to the downside, despite the past two days being bullish and today’s session showing signs that we might see a continued price drop.
Therefore, I expect the first few months of 2023 to be bearish for Terra Luna. There is a high likelihood that we might see its price dropping below the $1 price level in the next few trading sessions. However, a surge past the $1.6 resistance level will invalidate my bearish analysis.
Daily Chart
