Stellar Lumens (XLM) Technical Analysis: Stellar Price Tracking in Bearish Descending Triangle
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Stellar Lumens is desperately clinging on to its top 10 position in the crypto leaderboard this morning, while the market recoils from yet another steep correction. Today, we can see that the price action continues to track inside a descending triangle pattern which paints a very bearish picture going forward.
To make matters worse, Stellar’s main market cap competitor, Tron (TRX), has managed to bank an early lead ahead of other projects in the top 15, and is closing the gap for the number 10th spot with less than $80 Million to go.
In the news recently, Crypto.com has announced the listing of XLM on its feeless platform, which will allow customers holding a MCO Visa card to purchase goods with Stellar Lumens with over 40 million vendors worldwide. This is a big step towards the mainstream use and adoption of XLM, and will encourage more people to use Stellar Lumens as an electronic payment option, as opposed to just a speculative store of value. Looking at the XLM/USD gain in the last 24hrs however, we can see that this fundamental catalyst has done little in boosting bullish support for the asset.
Right now XLM is down 0.26% against USD pairing, but marginally out in front of BTC by 1.4%.
Stellar Price Analysis
On the 4-Hour XLM/USD chart we can see how the price has been oscillating between a flat base support along the 0.618 fibonacci level/ $0.118, and a sloping resistance level for the last 21 days.
This type of pattern shows that XLM buyers are growing increasingly exhausted and are unable to make higher highs. Eventually, bears either force the asset down on to the base support and bulls capitulate, or the asset naturally reaches maximum consolidation and breaks bearish.
In this instance, there are grounds to believe that XLM could go on to test the downtrending resistance one more time before the pattern completes itself, as the MACD and RSI show positive signs of short-term bullish momentum.
The 0.5 fibonacci level at $0.128 however, is likely to create friction in the uptrend and could prevent bulls from breaking back over the psychological $0.13 mark, if support peters out during the rest of the intraweek trade.
The bearish breakout zone for this asset (red area) sits between the $0.120 and $0.118 levels. If and when the base support breaks, it’s likely that we’ll see XLM unravel all the way down to the first major support at $0.109, before finding refuge on the 0.786 fibonacci level at $0.104.