xrp cryptocurrency price

Stellar history reveals an additional 30% decline

Stellar history reveals an additional 30% decline
Written by publisher team

  • XLM price closed below massive resistance, impeding the chance of recovery.
  • A series of drops of 50% is a painful precedent for highly motivated bulls.
  • Fibonacci levels dominate the charts.

XLM price is now trading under significant resistance at the 361.8% Fibonacci Extension Crossroads of the 2019-20 bear at $0.5462 and the 78.6% retracement of the February retracement at $0.5453. Moreover, it is trading below the previous handle of the cup base and the previous all-time high at $0.6083, which puts bullish speculators in a difficult position going forward.

XLM price charts aren’t confusing, but a dead cat bounce can be

The outlook for Stellar looked bullish on the breakout on April 10th from the base of a teacup with a handle. However, the new rally was not confirmed by the daily or weekly Relative Strength Index (RSI) and quickly stopped at the 461.8% extension of the 2019-20 bear market at $0.6900 before starting lower on April 14, before crashing at the end of the week.

With the price now below the critical resistance framed by the two Fibonacci levels mentioned in the first paragraph and the key levels of the previous base, speculators need to look at the historical precedents for Stellar since the September 2020 lows.

The last three corrections averaged about 50%, and two of the three corrections were rapid in duration, lasting four and nine days, respectively. If the precedent continues, Stellar is poised to quickly drop 33% from the current price level, melt the 100-day simple moving average (SMA) at $0.4097 and possibly test the March low at $0.3420.

If XLM price gives up the February low, it will break the series of retracement higher lows and put Stellar on course for a painful few months.

XLM/USD daily chart

If Stellar demands some commitment and emotion from the bullish speculators and regains $0.5453 weekly basis, the outlook should turn neutral and put the February high at $0.6083 in the cross. Of course, any further upside potential would be challenged at $0.6900.

The upside is faced with a deterioration in technical indicators and a history of significant corrections. Precisely for this reason, it is imperative that you let Stellar establish itself before engaging in the upside.

.

About the author

publisher team