The cryptocurrency market has continued its slow recovery, with the prices of most coins currently up by more than 1%
Terra (LUNA) is having a mixed start to the day. Its price rose by more than 1% earlier today, but it is now down by 0.6%. However, the coin could turn things around and rally in the coming hours and days.
One thing that could catalyse that rally is the Columbus-5 upgrade, which began this morning. This will bring improvements such as much greater scalability and interoperability with Cosmos, Solana and Polkadot.
What’s more, expansion of the Terra ecosystem will likely mean greater demand for the project’s stablecoin, UST, and Columbus-5 will see all the LUNA used to mint UST burned. This change was designed to put downward pressure on LUNA’s supply, which could mean its price is about to soar.
LUNA price outlook
Despite having a mixed start to the day, the LUNA/USD 4-hour chart is currently bearish. The relative strength index of 47 shows a coin that is still struggling, and its MACD line is trying to get back into the bullish zone.
At the moment, LUNA seems to have established a support level at $34, which is also its 200 simple moving average (SMA) on the 4-hour chart. If LUNA resumes its rally, it could surpass the first major resistance point at $38 over the next few hours.
LUNA/USD 4-hour chart. Source: TradingView
In the event of an extended rally, LUNA could top the $43 mark, which is also its all-time high price (achieved on 11 September). Unless there is a rally from the broader cryptocurrency market, LUNA is unlikely to surpass that level in the short term, though the effects of Columbus-5 could see LUNA surpass it in the medium to long term.
If the bears continue to dominate in the short term, then LUNA could lose its $34 support level fast. A bearish run could see LUNA defend the first major support level at $29. Further losses from the broader market could see LUNA drop towards the $23 mark for the first time since August.