XLM Price Prediction: XLM Slides Under $0.6, Intense Overhead Pressure Risks Massive Plunge to $0.5
- Stellar corrects extensively from May high at $0.78.
- Closing the day under $0.6 could market the beginning of an extended downtrend.
- Support anticipated at the 200 SMA could stop the potential losses eyeing $0.5.
Stellar recently revisited price levels above $0.7 but failed to overcome the resistance at $0.75. A correction occurred as sellers streamed in to take control. Stellar was greatly affected by Bitcoin-triggered instability in the cryptocurrency market, whereby the bearish leg extended below the Simple Moving Average (SMA) on the four-hour chart.
Stellar’s downtrend seems unstoppable in the short-term
The recovery from the declines in April took place within the ascending parallel channel until the ongoing correction came into play. XLM has lost several tentative support areas, including the channel’s middle boundary, the SMA and the lower edge.
At the time of writing, Stellar trades at $0.57 while buyers fight to secure the support at the 100 SMA. If this short-term anchor is broken, the bearish leg will likely extend the price action to $0.5. Note that the 200 SMA is in line to prevent the losses from exploring levels below $0.55.
XLM/USD four-hour chart
The prevailing technical outlook is mainly bearish based on short-term technical indicators such as the Relative Strength Index (RSI). Following the rejection from $0.78, the RSI has formed a higher low pattern. Currently, the indicator is closing the gap to the oversold, adding pressure to the tentative support levels.
Simultaneously, the Moving Average Convergence Divergence (MACD) reinforces the bearish outlook observed on the four-hour chart. As long as the MACD line (blue) maintains the wide divergence under the signal line, the least resistance path will be south. Therefore, it would be challenging for buyers to stop the declines immediately.
Looking at the other side of the picture
Holding onto the 200 SMA support will avert the declines eying $0.5. Moreover, investors will have the opportunity to increase their stakes by entering the market at a lower price. Reclaiming the ascending parallel channel position would be a massive milestone for the bulls as it will prove to the investors that recovery is possible.