Terra Classic has gained a lot of attention in the past few days as the price has seen a sudden surge of nearly 190%. Although the size of the rise was below average levels, it indicated higher trader participation. Currently, LUNC price has seen a strong recovery after a short pullback, recovering the crucial level at $0.0001 and bringing back strong bullish momentum.
On the other hand, the current rally appears to be supported by a strong spot build-up, which could lead to a further short squeeze. With this, the question arises whether LUNC price will rise above the pivotal resistance at $0.00014.
LUNC prices are poised for a sharp recovery
As shown in the daily chart, LUNC is trying to break above the long-term uptrend line near the $0.00012 area. The recent rally has been supported by successive bullish candles and rising trading volume, indicating increasing market participation. At the same time, the RSI continues to move near the overbought zone, indicating strong upward momentum despite a slight slowdown.
The price is currently trading above the major support level at $0.0001, which is now acting as an important psychological and technical level. If the price breaks the uptrend line, a rise to $0.00141 could be imminent, which could attract heavy buying volume. On the other hand, failure could push the price to local lows below $0.00009. However, technical indicators and derivatives point to a continuation of the uptrend.
Terra Classic’s open interest declines as prices rise
Despite the upward price action, Terra Classic’s open interest has seen a significant decline after recently rising to over $30 million. The decline in OI indicates that leveraged traders are gradually closing their positions after the recent rise. Typically, a lower investment rate during rising prices indicates that the market is reducing excess leverage rather than aggressively opening new long positions.
A rise in price coupled with a decline in open interest often indicates shorting or spot buying activity rather than leverage-fueled speculation. This means that bears may exit their positions as the price moves higher, creating additional buying pressure. At the same time, the absence of strong leverage reduces the risk of an immediate long squeeze, making the rally more structurally sound in the short term.
However, if open interest continues to decline sharply, the upward momentum may weaken over time due to the lack of new participation from derivatives traders.
Will LUNC face a short squeeze towards higher targets?
LUNC continues to show bullish strength after reclaiming the $0.0001 key level, while the decline in open interest suggests that the rally is currently driven by short covering and spot demand rather than excessive leverage. This setup maintains the possibility of an active short squeeze, especially if the price breaks above the immediate resistance near $0.00012.
Such a move could force the remaining bearish positions out, which could accelerate the rally towards $0.00014 and higher levels. However, failure to sustain above $0.0001 may weaken the bullish structure and lead to a pullback towards the $0.000073 support area.
Was this writing helpful?
The story ends here
Trust with CoinPedia:
CoinPedia has been providing accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert team of analysts and journalists, following strict editorial guidelines based on EEAT (Expertise, Expertise, Credibility and Trustworthiness). Each article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy ensures unbiased reviews when recommending exchanges, platforms or tools. We strive to provide timely updates on everything cryptocurrency and blockchain, from startups to industry specialties.
Investment Disclaimer:
All opinions and ideas shared represent the author’s own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication accepts responsibility for your financial choices.
Sponsored and advertisements:
Sponsored content and affiliate links may appear on our site. Ads are clearly labeled, and our editorial content remains completely independent from our advertising partners.
Read upcoming news
