Mirror Protocol, a decentralized finance (DeFi) protocol built on the Terra blockchain, was hit by one of the biggest crashes in financial history this week after Vladimir Putin ordered military strikes against Ukraine.
Terra tokens recover
The native token of the Mirror Protocol, MIRfell to $0.993 on Feb. 24, its worst level to date amid a market-wide crypto sell-off. However, a strong rebound ensued, taking the price to a high of $1.41 two days later, an increase of more than 40% when measured from the MIR record low.
Like the fall MIR’s pullback to the upside followed similar rallies elsewhere in the cryptocurrency market. But interestingly, MIR/USD returns seemed higher than some highly valued digital assets, including Bitcoin (BTC) and ether (ETH).
In particular, Bitcoin surged as much as 17% after bottoming locally on Feb. 24 below $34,500. In contrast, Ether’s gains in the same period were just over 25% after bouncing from $2,300.
On the other hand, Earth (MOON), whose protocol hosts the Mirror Protocol synthetic asset platform, rallied more than 50% in the same period.
Curiously, another token backed by the Terra blockchain, Anchor Protocol (ANC), jumped more than 45% from its Feb. 24 low of $2.64hitting its best level to date just below $4.
MIR forms a “golden cross” but…
The recent bull run in the Mirror Protocol market also led to the formation of a pattern called the “golden cross”.
In detail, MIR’s 20-4H Exponential Moving Average (20-4H EMA; the green wave) rose above its 50-4H EMA (the red wave), a move that typically follows a short-term uptrend, based on recent Mirror Protocol market history.
Nevertheless, MIR’s four-hour Relative Strength Index (RSI) readings – which topped 70 over the weekend – warned of its “overbought” status. This has coincided with a correction in the Mirror Protocol market, with the MIR now down over 10.5% from its retracement high near $1.41.
The decline has seen MIR break below $1.36, one of its previous support levels which also concurs with the 61.8 Fib line of a Fibonacci retracement chart made from the $1.58 high to the minimum of $1.00.
Price now sees further declines towards the next support levels near the 0.5 Fib line around $1.29, followed by the 0.236 Fib line at $1.13.
Conversely, if MIR sustains above its 20-4H and 50-4H EMAs, its probability of retesting $1.58 could increase. His bullish outlook also depends on how the current geopolitical conflict in Eastern Europe plays out and its impact on Bitcoin.
Notably, the correlation coefficient between Bitcoin and Mirror Protocol sits close to 0.75 above zero, which means that the price of MIR is more or less mirroring the movements of the main digital asset at the moment.
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