• XLM price continues to decline, but within the bounds of a descending channel.
  • Stellar six-hour Relative Strength Index (RSI) showing a bullish momentum divergence, hinting at a bounce
  • June 26 low of $0.228 is credible support, reinforcing the channel’s midline.

XLM price triggered a larger symmetrical triangle pattern on July 7 while trading in a descending channel since June 30. For now, the longer-term outlook remains bearish, but there is evidence that Stellar may be on the cusp of a mild rebound on the intra-day charts that could test the channel’s upper trendline or even the 50 six-hour simple moving average (SMA).

XLM price to give bears a chance to catch their breath

On July 7, XLM price convincingly broke out from a symmetrical triangle pattern, marking the second symmetrical triangle to trigger since June 11. Stellar did notch an oversold reading on the six-hour RSI following the breakout, but the price rebound was muted and stalled at the upper trend line of the descending channel, returning the focus to the downside.

Today, XLM price is striking support at the June 26 low of $0.228, which coincides closely with the channel’s midline at $0.229. The constructive response to the June 26 low and the channel’s midline combined with the unfolding bullish momentum divergence on the six-hour RSI proposes an intra-day bounce in the coming hours. 

If an XLM price rebound gains traction, it will discover resistance at the channel’s upper trend line at $0.246 and the 50 six-hour SMA at $0.252. It would be a minor pause in the Stellar decline, but it offers an entry point for new short positions by agile day-traders.

XLM/USD 6-hour chart

XLM/USD 6-hour chart

As stated, the long-term XLM price outlook remains negative, with the symmetrical triangle pattern projecting a decline of 34% from the breakout and a final low of $0.171. It would wipe out most of the 2021 gains for Stellar and bust the support attached to the June 22 low of $0.198 and the 78.6% Fibonacci retracement level of the March 2020-May 2021 advance at $0.191.

XLM/USD daily chart

A daily close above $0.252 would be the initial signal that the decline is over, and XLM price is readying to test the symmetrical triangle’s apex at $0.278, generating a 20% gain from the current price. 

The 50-day SMA at $0.313 will challenge any Stellar strength beyond the apex.

Overall, the six-hour chart does reveal an opportunity for a bounce, but the larger price structure continues to target lower prices moving forward.

Here, FXStreet's analysts evaluate where Stellar could be heading next as it seems bound for higher highs.

 

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

SafeMoon price looks to skyrocket 30% as technicals flash buy signal

A brief technical and on-chain analysis on SafeMoon price. Here, FXStreet's analysts evaluate where SAFEMOON could be heading next.

More Bitcoin news

Uniswap price eyes 20% gains as UNI technicals scream ‘buy'

Uniswap price faced a blockade at $21.51, slowing its recovery. The RSI reveals a bullish divergence in play, hinting at a 20% climb. A breakdown below $18.37 will invalidate the bullish thesis.

More Litecoin news

Litecoin contemplates 17% ascent after reclaiming crucial barrier

Litecoin price experienced the second flash crash, which bottomed on September 21. While the descent was steep, the recovery seems to be coming along well. The recent upswing has pushed past a key resistance level, but LTC needs to hold above it to confirm buyers’ presence.

More Litecoin News

XRP price flips massive support floor into formidable resistance

A brief technical and on-chain analysis on XRP price. Here, FXStreet's analysts evaluate how Ripple behaves as it trades below key resistance.

More Ripple news

BEST CRYPTO BROKERS/EXCHANGES



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

BTC

ETH

XRP