• 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

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.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Shiba Inu bulls can't hold SHIB from dropping to $0.000006

Shiba Inu price has fallen -28% over the past four trading sessions. Bears remain in control as bulls fail to complete a breakout above $0.000008. Bulls must hold $0.000007 to prevent a drop towards $0.000006.

More Shiba Inu News

Solana price could reach $175 after SOL's recent rebound

Solana price bounced off a significant Fibonacci level. Bulls ramped up price action with 18% of profits. Another leg higher will hold 20% of additional profits for bulls if they can clear $150 in Solana price action.

More Solana News

Elrond forms bull trap anticipating 25% downturn

Elrond price is clawing back, paring some losses from the previous day. Bulls are getting rejected at $208. More downturns to come as a bull trap looks to be forming.

More Elrond News

Alts rebound while BTC tends to its wounds

BTC closes above the August 1 swing high at $42,599, indicating the end of descent for now. ETH shows signs of life after a close above $3,011 support floor. XRP needs to climb above the $1.01 demand barrier to enter the safe zone.

More Cryptocurrencies News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast