Stellar’s long-term squeeze around the $0.10611 zone eventually broke down from a descending triangle setup on the 24-hour chart. Meanwhile, the latest liquidations flipped the long-term foothold to an immediate resistance.
A significant closing beneath the nearest support would open downside gates for the asset in the upcoming days. XLM bulls should trigger buying volume surges to erase the dominant bearish tendencies. While publishing this content, XLM changed hands near $0.1026.
Stellar Daily Timeframe
Meanwhile, Stellar’s southbound reversals from $0.23 saw it printing a 3-month trend-line resistance on the daily chart. The alternative token lost more than 47% from May 5 to 20-month lows on July 13. This trend-line resistance plus the 20 Exponential Moving Average has supported sellers in securing renewed momentum within the past few months. The previous month had XLM printing lower peaks as it maintained the $0.1061 zine. Therefore, forming a descending triangle pattern that favored selling activities.
Bears continuing to heighten momentum might see them aiming for the $0.0987 retest in the upcoming sessions. A closing beneath the $0.1019 mark might uncover XLM to the downside journey. Meanwhile, buyers rejecting the bearish efforts could mean a stretched squeeze phase around the POC (Point of Control) within the $0.11 price level.
Reasoning
The RSI (Relative Strength Index) has exhibited bearish tendencies over the past two weeks. An extended southbound journey would back sellers in securing new lows. Moreover, the Chaikin Money Flow surrendered its midline support as bears converted it to resistance within the past few hours. This money volumes drop might hint near-term slowdown on its charts. Moreover, the ADX flashed a significantly weak XML directional trend.
Final Thought
The bearish break beneath the descending triangle might mean extended declines for XLM in the upcoming days. Price targets would stay as mentioned above. Nevertheless, investors should assess broad market cues and on-chain activities to ensure informed decisions. Such a move would help minimize bearish invalidation risks.
The crypto market saw uptrends following the US CPI data, with Bitcoin bouncing back beyond $20K. While publishing this post, BTC traded at $20,785. The market remained green today, a relief for investors following massive slumps. However, the rally could be short-lived, translating to price slides in the coming hours or days.
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