XLM Price Forecast: Stellar Risks Plunging Toward $0.5 if this Crucial Support Crumbles
- Stellar depends on the ascending parallel channel and the 50 SMA support to resume the uptrend eyeing $0.8.
- All short-term technical indicators levels have a bearish outlook, hinting at the bearish leg extending further.
Stellar has incurred a significant amount of losses since the beginning of the week. The weekend session had culminated in a massive upswing with gains almost hitting $0.8. However, a hurdle at $0.78 cut short the bullish momentum, setting the stage for correction.
In the meantime, XLM trades at $0.65 after holding onto key technical support at the 50 Simple Moving Average (SMA) on the four-hour chart. A recovery will ensure if bulls defend this anchor zone. However, various technical levels hint at the bullish leg extending further.
Stellar least resistance path seems downward
The cross-border money transfer token dances slightly above an ascending parallel channel’s lower edge, while the middle boundary has limited the upside. The ongoing recovery does not appear to have the strength to push past the short-term hurdle based on the Moving Average Convergence Divergence (MACD) indicator’s technical outlook.
It is worth noting that the MACD has retreated from weekly highs of 0.028 and is moving toward the midline. Besides, the MACD line has extended the action beneath the signal line, catalyzing the downtrend. If this indicator’s technical picture stays the same, Stellar will drop and explore levels below $0.6 and toward $0.5.
XLM/USD four-hour chart
From the chart, we can observe crucial support at the 50 SMA, which has been reinforced by the lower edge of the ascending channel. Closing the day under this zone would be a massive bearish signal. An uptick in overhead pressure is likely to occur, forcing Stellar to revisit price levels heading to $0.5.
Stellar’s bullish narrative
It is essential to realize that the bearish outlook may be thrown out the window if XLM holds within the ascending channel. Here, bulls will have the opportunity to forge a mission for sustaining recovery to $0.8, hence making the framework for the ultimate upswing to $1.
Similarly, the Relative Strength Index (RSI) shows that bulls gradually take back control. This signal comes after support at the midline and the initial recovery toward the overbought region.