• XLM price nears the apex of a symmetrical triangle continuation pattern that has been forming since June 21.
  • Stellar failing to hold the critical support at the 50-week simple moving average (SMA).
  • The oversold condition in June has not evolved into a substantive rally in XLM price.

XLM price is nearing the latter stage of a symmetrical triangle pattern formed in response to the noteworthy oversold condition on the daily Relative Strength Index (RSI). As a continuation pattern, the probabilities are tilted towards a bearish resolution and potentially a new low for Stellar.

XLM price has nowhere to go, but down

XLM price closed 2Q down almost 30%, making it the worst quarter since 3Q2019. The overall decline of 75% from the May 16 high of $0.797 was highlighted by a May 19 loss of 29% and a June 20 loss of 20%.

Since the June 22 low of $0.198, XLM price has been coiling in a symmetrical triangle pattern, releasing the oversold condition but not revealing many clues as to the directional intentions of Stellar moving forward.

Two levels have been pivotal to XLM price during the development of the symmetrical triangle; the May 23 low of $0.274 and the exacting 50-week SMA at $0.269. Combined, they have served as a magnet for Stellar, sometimes offering resistance and other times providing support.

XLM/USD weekly chart

XLM/USD weekly chart

The measured move of the symmetrical triangle is 50%, projecting a final XLM price of $0.127. It would erase most of the 2021 gains and generate a loss of over 80% from the May high.

A more reasonable and higher probability scenario is for XLM price to sweep below the June 22 low of $0.198 and bottom in the vicinity of the 78.6% Fibonacci retracement of the March 2020-May 2021 advance at $0.191. It would represent a 25% decline from the current price.

To trigger the symmetrical triangle pattern, XLM needs to trade below $0.250. Selling should accelerate after that, as the 50-week SMA and the bearish Death Cross pattern press on Stellar.

XLM/USD daily chart

XLM/USD daily chart

XLM price can avoid the bearish thesis with a daily close above the union of the May 23 low of $0.274 with the triangle’s upper trend line, currently at $0.284. If successful, Stellar may rally to the declining 50-day SMA at $0.336 or the apex of the previous symmetrical triangle at $0.343.

To review, XLM price designed a symmetrical triangle following the crash in May, and as a continuation pattern, Stellar resolved to the downside with a 40% decline in June. Now it has plotted another symmetrical triangle following a drop. If precedent holds, XLM price is about to have a moment of déjà vu.

The bottom line is that Stellar investors need to be prepared for the third leg down of the correction that began in May.

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

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Crypto bulls on winning streak pushing for more

Bitcoin price jumped this week after a shift in sentiment on Thursday when global equities went back in the green and investors favored riskier assets like cryptocurrencies. 

More Bitcoin News

Binance support for Polkadot parachain auctions could send DOT to new all-time high

At the Sub0 Conference representatives of Parity Technologies, DOT founders Gavin Wood and Robert Habermeier, confirmed that Polkadot is now ready to implement parachains, auctions and crowd loans on its blockchain network. 

More Polkadot News

XRP price awaits for volume to skyrocket to $2

A brief technical and on-chain analysis on XRP price. Here, FXStreet's analysts evaluate how Ripple bulls take control.

More Ripple News

Shiba Inu whales buy the dip after SHIB loses $600 million in market cap

Shiba Inu concluded a massive rally, and SHIB price plunged on October 14. Proponents were awaiting a Dogecoin flippening, however, SHIB dropped to 14th rank by market capitalization soon after. 

More Shiba Inu 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