Crypto News- Stellar is currently grappling with a challenging scenario as it strives to recover its former support levels. The daily technical analysis of XLM indicates a downward trend that commenced on July 12, following the cryptocurrency’s peak at $0.197 earlier in the year.
XLM Price Decline: Could This Indicator Provide Insights into Its Potential Recovery?
During this descent, Stellar fell below the crucial support level of $0.110, and in combination with the persisting long-term descending trendline, it formed a bearish descending triangle pattern. Despite its efforts, Stellar couldn’t reclaim the resistance trendline or the $0.110 threshold, resulting in a sharp decline starting from October 16.
The daily Relative Strength Index (RSI) provides further evidence of a bearish trend. The RSI is a valuable tool for traders, helping them identify overbought or oversold market conditions, which in turn influences their trading decisions. Typically, an RSI reading above 50 suggests a bullish trend, while below 50 indicates the opposite.
The current RSI reading, below 50 and on a downward trajectory, confirms the bearish sentiment surrounding Stellar.
It’s worth noting that the RSI reached oversold territory on October 15, as indicated by the white icons on the chart. On the previous two occasions, such occurrences were followed by significant price increases.
If this decline matches the pattern’s entire height, as marked in black, XLM could find itself just below the $0.076 horizontal support level, which has held firm since March. Such a drop would represent a 30% decrease from the current price.
Despite this seemingly bearish outlook, there is potential for an upward reversal thanks to the oversold RSI. For this to materialize, Stellar would need to break free from the existing trendline and surpass the $0.110 resistance level. In such a case, a 30% increase to $0.140 could be in the cards, aligning with past upward movements, indicated in green, triggered by an oversold RSI.
Leave a comment