52 Pickup
Recently, a deal was announced wherein LUNA was sold for BTC at a price of about $52/LUNA. Some commentators on crypto-Twitter are contending that this represents the new floor price for LUNA. Over a time period of your choosing, how many days has LUNA closed above this price? How many days has it closed below this price?
Introduction
In technical analysis (TA), the floor or support identifies a price of a given asset in which demand is higher than supply as it is seen as an interesting entry point for buyers. Therefore, when price is going down, at some point enough buyers will gobble up all demand and prices will raise again.
The case for the new floor price of LUNA comes when the price rally started, around last week of November 2021, which according to TA can be compared to know patterns of past price action charts and predictions on future prices can be made. This predictions are taken by TA proponents as the holy grail of market analysis while other people think it is oil-snake and don't care about this type of analysis.
I couldn't find any mention to the deal selling LUNA for BTC at about $52/LUNA but I could find the following tweets from December 4th
Methodology
To obtain the close price (rather than any daily price or the average daily price) I created two CTE tables based on the terra.oracle_prices
table.
The first one contains the date as day (block_timestamp::date
), the date as hour (block_timestamp
) and the price in USD (price_usd
). The second one contains the date as day and a max(block_timestamp
) grouped by the date as day to obtain a series of the last known price for the day, which happens to be the price at 23.00h.
With these two CTE created, I can then visualize the price for the timeframe chosen and using a CASE
function diferentiate the days that close above or below the floor, in this case 52$. Chosen Timeframe is since November 1st, 2021.
Counting the days aggregating by the floor variable will give the count of days above and below the set limit. In our case, since November 1st, LUNA price closed 75 days above 52$ and 42 days below. An additional chart shows the percentage of days above and below floor price for the chosen timeframe.
Conclusions
Since the ATH of 103$ on December 27th, LUNA has retraced to a price of around 52$, so this can well be taken as the current floor. It reached this level for the first time since the ATH on Januray 28th and has been hoovering around it until recently, having seen an increase of over 30% in the last 7 days. So the analysis of the Twitter-commentators back in December 4th was quite spot on!
Although TA has its defendants and its detractors, I think some analysis coming from TA can help since it captures the market psychology; if there are enough people thinking that a 52$ LUNA is a good entry price, then it will hold as a support since demand will increase around this point.