Stellar (XLM) Correction Could See It Trading In Another Falling Wedge


Stellar (XLM) has been on fire for the last few days. The price spiked up soon after breaking out of the falling wedge. It even refused to correct with the rest of the market despite overbought conditions on the RSI for XLM/BTC chart above. IFT Stochastic indicates a pullback is likely near term. This pullback might put Stellar Lumens (XLM) back in a falling wedge against Bitcoin (BTC) just as we have seen before. Since last year, we have seen Stellar Lumens (XLM) trade in falling wedges three times.

The first falling wedge was formed between March and September last year. The second falling wedge was formed in early January this year and extended all the way to April. The third falling wedge was formed between April and July soon after Stellar (XLM) had broken out of a falling wedge. This goes on to show how it is likely that XLM/BTC might exhibit the same behavior this time considering a pullback is likely as the crypto market in general and Stellar Lumens (XLM) in particular are overbought at the moment.

Stellar Lumens (XLM) has been trading favorably against both Bitcoin and the US Dollar ever since its partnership with IBM. The tech giant was willing to use its connections to put Stellar (XLM) in front of central banks and large financial institutions to which IBM already is a service provider. Rumors of central banks issued cryptocurrencies based on Stellar blockchain gave the cryptocurrency a lot of clout and credibility. Stellar (XLM) is already popular for being of the most robust blockchains with Stellar Lumens (XLM) transactions taking just a few seconds to make. With Ripple (XRP) being the face of controversies and legal battles over its status as a potential security, the stage is all clear for Stellar Lumens (XLM) to put in front of an even larger audience than before.

Stellar Chart With Values

XLM/USD chart above shows that there is room for further downside and that Stellar (XLM) price could fall lower short term to find a bottom. However, a series of positive developments including a green signal from Islamic scholars terming Stellar (XLM) as Shariah compliant means that Stellar Lumens (XLM) is ready to attract investors from countries like Saudi Arabia, UAE and Qatar. This will no doubt have a big impact on the price of Stellar (XLM) as new investors flock in.

The price of Stellar (XLM) has previously marked lows just below 20 cents. However, if this downtrend continues, the price will have to fall even lower to mark another low. This could be around 10 cents or lower as the price settles to find a bottom for this correction. The lower Stellar (XLM) trades along the triangle, the easier it gets to break out of it. The volume has also been very low overall which also explains why it was so easy for a few bored investors to FOMO in and pump the price double digits in a matter of just a few hours.

Read more at:  Crypto Daily

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