Sheldon McIntyre, CMT
Independent Analyst
- XLM price recovering from overnight lows, but the rebound is deceptive.
- Daily Relative Strength Index (RSI) is far from an oversold reading.
- 21Shares has expanded its roster of crypto ETPs with the launch of Stellar XLM ETP.
XLM price busted the neckline of a head-and-shoulders top pattern yesterday and quickly plunged below the 100-day simple moving average (SMA) before gaining price traction and propelling higher. However, the rebound has not changed the bearish outlook first highlighted in an April 20 FXStreet article.
XLM price trying to shake the grip of bearish historical precedent
The last three corrections have averaged around 50%, and two of the three were short, lasting four and nine days, respectively. As the Stellar head-and-shoulders top is constructed, it forecasts a loss of just over 50% from the April 13 high.
A decline of the magnitude mentioned above would drive the daily RSI below 30, announcing a momentum low for the decline and the technical basis for a new, long-term rally. Without it, Stellar will be challenged to complete a recovery to new highs.
In the path of the head-and-shoulders measured move target of $0.304 is the 100-day SMA at $0.417, the overnight low at $0.390, and the rising trendline from the February 22 low at $0.372. The measured move target also includes an undercut of the February low at $0.314.
To reiterate, at the measured move target, Stellar will be down over 30% from the current price, 34% from the neckline break, and 55% from the April 13 high. Moreover, if the February low is shattered, it will break the series of higher lows for corrections and thrust bullish Stellar speculators into a long waiting game.
XLM/USD 12-hour chart
If the Stellar rebound firms, the 100 12-hour simple moving average (SMA) at $0.455 will be the first line of resistance, closely followed by the neckline at $0.463. A daily close above the neckline would raise the odds of a test of the 50 12-hour SMA at $0.513, but the meeting of Fibonacci levels at $0.545 will prove to be a significant challenge.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Bitcoin, Ethereum prices seesaw ahead of the Fed’s decision on rate hike
The US Federal Reserve is expected to raise interest rates while facing the tough task of tackling the banking crisis. Economists expect the central bank to increase its target rate range to 4.75% -5%, although there is a debate as some believe the Fed will not raise its rates at all. Bitcoin price rally steadied above the $28,000 level after yielding nearly 15% gains over the past week.
Aptos Price Forecast: This key level will determine if APT will rally 20% or crash 40%
Aptos price lacks directional bias as it consolidates below a critical hurdle. This level is key in determining where APT will head next. Investors need to wait for confirmation before making their decision. Aptos price rallied 554% between December 30, 2022, and January 26, 2023. This massive uptrend set up a local top at $20.40, resulting in a reversal that pushed APT down by 52%.
These altcoins could yield massive gains after Cardano and XRP prices rally this alt season
While large market capitalization assets Bitcoin and Ethereum hold steady, altcoins like Cardano and XRP have yielded double-digit gains overnight. Crypto experts believe Bitcoin’s rising dominance signals the popcorn effect is close, gains will continue spilling over in altcoins like Cardano (ADA) , XRP and Cosmos Hub’s ATOM.
XRP price tags $0.49 as Ripple bulls make a comeback
Ripple, one of the largest altcoins by market capitalization, witnessed a massive run up to the $0.49, ahead of the US Federal Reserve’s rate hike decision. The recent updates in the SEC v. Ripple lawsuit and the banking crisis have turned market participants bullish on XRP and cryptocurrencies.
Weekly Recap: Bank runs, stablecoin drama, Voyager bankruptcy hearing, threat to DOX Shiba Inu founder
US bank runs sent shockwaves through market participants, traders turned to Bitcoin and the “safe haven” narrative made a comeback. Binance’s $1 billion acquisition of bankrupt crypto lender Voyager is back on track with a ruling from a New York bankruptcy judge.