XLM Price Prediction: Stellar Dives Into Losses Galore After Cracking $0.6 Support
- Bears slash Steller's significant gains to $0.8 as $0.5 calls.
- If broken, the 200 SMA support will validate the downtrend.
Stellar has succumbed to the bearish advances following a massive gravitational force in the cryptocurrency market this week. The cross-border fund transfer token had lifted to $0.8 last week, reviving hopes for an upswing to $1. However, Bitcoin’s drop from highs around $60,000 to $40,000 pulled most crypto assets into a correction.
XLM is trading at $0.57 at writing, and after losing several tentative support levels, including $0.7, the 100 Simple Moving Average (SMA), and the former buyer congestion zone at $0.6. Meanwhile, the immediate downside has been protected by the 200 Simple Moving Average (SMA), as shown on the four-hour chart.
Steller's downtrend is far from over
As mentioned, the 200 SMA is the short-term anchor zone. Bulls must hold firmly to this zone to avoid losses from extending to $0.5. Conversely, short-term technical indicators in the same timeframe emphasize the possibility of the losses continuing into the upcoming sessions.
The Moving Average Convergence Divergence (MACD), an indicator following the general trend direction, has a bearish signal. The vivid outlook came into the picture after the MACD cracked the mean line (0.00) support and delved into the negative region. Furthermore, the MACD line (blue) has crossed below the signal line and expands the divergence as a signal for the bearish tight bearish grip.
XLM/USD four-hour chart
A comprehensive look at the Relative Strength Index (RSI) shows that Stellar is not oversold. Therefore, there is more room for losses, especially if the support at the 200 SMA is shattered. The RSI is heading toward the oversold region; thus, validating the downswing.
Looking at the other side of the fence
Stellar bulls are working around the clock to get a four-hour close above the 200 SMA. A move such as this will ensure that buyers shift the focus from securing support to pulling XLM above $0.6. In other words, the next few hours are critical to Stellar because a recovery past $0.6 could be championed, or losses will stretch to $0.5.