Mirror Protocol, a decentralized finance (DeFi) protocol built on the Terra blockchain, was hit by one of the biggest meltdowns in financial history this week after Vladimir Putin ordered military strikes against Ukraine.
Gathering Terra Tokens
Mirror Protocol’s native token, MIR, fell to $0.993 on Feb. 24, its worst level yet amid a selloff in the broader crypto market. But a strong rebound ensued, taking the price to $1.41 two days later, up more than 40% from the MIR’s record low.
Much like the decline, MIR’s upward retracement came on the heels of similar rallies elsewhere in the crypto market. But interestingly, MIR/USD yields looked larger than some of the popular digital assets, including Bitcoin (BTC) and Ether (ETH).
Notably, Bitcoin soared as much as 17% after hitting a local low on Feb. 24 below $34,500. In contrast, Ether’s gains over the same period were found to be just over 25% after rebounding from $2,300.
In contrast, Terra (LUNA), whose protocol hosts the synthetic asset platform of the Mirror Protocol, rebounded more than 50% over the same period.
Interestingly, another Terra blockchain-backed token, Anchor Protocol (ANC), jumped over 45% from its Feb. 24 low of $2.64, reaching its best level yet just in below $4.
MIR paints a “golden cross” but…
The recent upward boom in the mirror protocol market has also resulted in the formation of a so-called golden cross pattern.
In detail, MIR’s 20-4H exponential moving average (20-4H EMA; the green wave) jumped above its 50-4H EMA (the red wave), a move that typically follows a short-term uptrend. , according to the recent Protocol Market History Mirror.
Nonetheless, four-hour relative strength index (RSI) readings from the MIR – which rose above 70 over the weekend – raised the alarm about its “overbought” status. This coincided with a correction in the Mirror Protocol market, with the MIR now down more than 10.5% from its retracement high near $1.41.
The decline took the MIR below $1.36, one of its previous support levels which also converge with the 61.8 Fib line of a Fibonacci retracement chart made from a high of 1, $58 at a low of $1.00.
The price is now eyeing further dips towards the next support levels near the 0.5 Fib line around $1.29, followed by the 0.236 Fib line at $1.13.
Related: Cointelegraph Consulting: A Look at Terra’s Ecosystem
Conversely, if MIR holds above its 20-4H and 50-4H EMAs, its probability of retesting $1.58 could increase. Its bullish outlook also depends on how the ongoing geopolitical conflict in Eastern Europe unfolds and its impact on Bitcoin.
Notably, the correlation coefficient between Bitcoin and Mirror Protocol sits at almost 0.75 above zero, which means that the MIR price more or less reflects the movements of the main digital asset at the moment.
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