Stellar (XLM): Aggressive Investors May Leverage This Setup’s Break
While publishing this news, Stellar remained consolidated while experiencing a massive clash between sellers and bears around the POC (Point of Control). Meanwhile, the latest declines comprised a bearish setup on the asset’s daily chart.
Any closing under this pennant might open the downside path in the upcoming sessions. XLM bulls should inflict a surge in buying strength to nullify the prevailing bearish tendencies. While writing this content, XLM changed hands at $0.11233, following a 2.57% drop within the past 24 hours.
Stellar Daily Timeframe
The bearish drop from $0.2 formed a 3-month trend-line resistance on XLM’s daily chart. The alternative token lost more than 58% from April peaks to hit 19-month lows on June 18. Meanwhile, the trend-line resistance has halted several recoveries within the past couple of months. As a result, the latest upward channel breakdown led to a bearish pennant. That saw XLM declining beneath the 20 Exponential Moving Average and confirmed a bearish regime.
Consistent actions by bears might see them breaking beneath the pennant. A closing under this mark might expose the altcoin to declines toward $0.1019. Meanwhile, buying pressure resurgence might see the nearest trend-line resistance undermining efforts by buyers. Also, sellers seem to cement their position in prevailing dynamics as the short-term Exponential Moving Average looks south.
Reasoning
The Relative Strength index took a bearish outlook within the past few days. The resistance at 42 has halted short-term buying efforts on the XLM chart. Moreover, the on-balance volume’s higher highs (last week) printed a bearish divergence with Stellar price movements. That matched the current bearish stance on the alternative token.
Bears have controlled the crypto market this year, dragging the global market cap beneath the $1 trillion level. While publishing this blog, this metric stood at $906.25 billion. The marketplace remains weak as bears contemplate downside movements.
Final Thought
With the current bearish pennant pattern nearing the southbound 20 Exponential Moving Average, Stellar might witness a possible drop. A break under the setup might see XLM on a 9% downward trip. Interested traders should watch broad market sentiment plus on-chain activities for informed decisions. That remains crucial to reduce the risks of possible bearish invalidation.
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