After Vladimir Putin launched military attacks against Ukraine, MIR formed a golden cross. Mirror Protocol, a decentralised finance (DeFi) protocol built on the Terra blockchain, was hit by one of the greatest financial collapses in history this week.
Terra tokens are on the rise
MIR, the native currency of Mirror Protocol, fell to $0.993 on February 24, its lowest level to date, after a selloff in the broader crypto market. However, the price quickly rebounded, reaching as high as $1.41 two days later, a gain of more than 40% from MIR’s record low.
MIR’s positive retracement followed similar recoveries elsewhere in the crypto market, just like the plunge. However, MIR/USD gains appeared to be higher than some of the most widely valued digital assets, such as Bitcoin (BTC) and Ether (ETH) (ETH).
Bitcoin, for example, has rebounded 17 percent since bottoming out near $34,500 on February 24. Ether, on the other hand, gained a little more than 25% in the same time frame after bouncing from $2,300.
Terra (LUNA), on the other hand, whose protocol supports the Mirror Protocol’s synthetic assets platform, has recovered by more than 50% in the same time period.
Anchor Protocol (ANC), a Terra blockchain-backed cryptocurrency, rose more than 45 percent from its February 24 low of $2.64 to its highest position to date, just shy of $4.
The recent rising explosion in the Mirror Protocol market has resulted in the construction of a so-called golden cross pattern.
MIR paints a “golden cross” but…
According to the Mirror Protocol’s recent market history, MIR’s 20-4H exponential moving average (20-4H EMA; the green wave) soared over its 50-4H EMA (the red wave), a move that often precedes a short-term rise.
Despite this, the MIR’s four-hour relative strength index (RSI) — which rose above 70 over the weekend — signalled that it was “overbought.” This has corresponded with a market drop in Mirror Protocol, with MIR now down more than 10% from its retracement high near $1.41.
MIR has broken below $1.36, a previous support level that also coincides with the 61.8 Fib line of a Fibonacci Retracement Graph drawn from the $1.58 swing high to the $1.00 swing low.
The price is currently looking for more dips below the next support levels near the 0.5 Fib line, which is around $1.29, and the 0.236 Fib line, which is around $1.13.
If MIR manages to stay above its 20-4H and 50-4H EMAs, the chances of it retesting $1.58 rise. Its bullish future is also contingent on the outcome of the continuing geopolitical situation in Eastern Europe and its implications for Bitcoin.
Notably, the correlation coefficient between Bitcoin and Mirror Protocol is near 0.75 above zero, implying that the price of MIR is, for the time being, more or less mirroring the movements of the top digital asset.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.