XLM Price Prediction: Stellar recoils from key support, but weak technical levels threaten the recovery
- Stellar attempts to break the downtrend hit a barrier at $0.45.
- Securing support at $0.4 could allow bulls to focus on higher price levels toward $0.8.
Stellar has started another recovery mission after holding onto support provided at $0.25. The cross-border token briefly exchanged hands beneath the descending parallel channel, but a reflex recovery sent XLM above $0.3. The bullish price action continued, and the price pulled above the channel.
Meanwhile, the upswing failed to overcome the resistance at $0.45 despite lifting above the descending channel. Stellar is trading at $0.41 amid the rush by bulls to hold firmly to the support at $0.40.
Stellar’s technicals wobble, making recovery a challenge
The Moving Average Convergence Divergence (MACD) recently turned bullish. Following the support at $0.25 and the reflex recovery above $0.3, the MACD line crossed the signal line, thus validating the uptrend. Nonetheless, the barrier at $0.45 proves that the momentum is not strong enough to sustain gains above $0.5.
Subsequently, a death cross pattern on the four-hour chart shines a light on the apparent bearish narrative - this pattern forms when the shorter-term moving average crosses below a longer-term moving average. For instance, the 50 SMA has recently crossed under the 200 SMA, inferring the downtrend is still in order and may last longer.
XLM/USD four-hour chart
The Relative Strength Index (RSI) is currently pointing downward after rising from the oversold area to the midline. If the indicator heads back to the oversold zone, sell orders will be triggered as losses extend toward $0.25.
It is essential to realize the challenging recovery is made worse by a sell signal from the SuperTrend indicator. The call to sell came into the picture recently, with the indicator flipping above Stellar and turning red. Perhaps a break above $0.45 could change the signal to bullish in the coming sessions. However, if the bearish narrative holds, XLM will start exploring levels under $0.4.
XLM/USD four-hour chart
Looking at the other side of the picture
The TD Sequential Indicator may present a buy signal on the four-hour chart in the coming sessions. This call to buy will come in a red nine candlestick. It will be validated if the either and ninth candlesticks close above the seventh and the sixth. A buy signal signifies a dwindling bearish grip, allowing bulls to take control.