Stellar (XLM) Makes a Sharp Decline, Rejects Deep into the Oversold Region

Stellar (XLM) Makes a Sharp Decline, Rejects Deep into the Oversold Region

Key Resistance Levels: $0.09, $0.10, $0.11
Key Support Levels: $0.06, $0.05,$0.04

XLM/USD Long-term Trend: Bearish
Stellar has sunk to the low of $0.042 after the bears broke the support at $0.050. XLM was previously trading in a price range between the levels of $0.050 and $0.090. XLM fell to a low of $0.042 and pulled back to retest the resistance at $0.047. The coin is in a downward move after the retest.

XLM may further depreciate if the selling pressure resumes and the low of $42 is broken. The coin may fall to a low of $0.036 If the bears are successful. At the low of $0.036, XLM will be said to be in the oversold region. The selling pressure may have been overdone as the bears have complete control of the coin. Meanwhile, if the bulls decide to rebound at the current level, it may face resistance at $0.050.

XLM/USD - Daily Chart

Daily Chart Indicators Reading:
XLM is trading in the oversold region of the daily stochastic indicator. The blue and red bands are above the 20% range which indicates that XLM is in a bullish momentum. The bears broke the support line of horizontal channel terminating the range-bound movement.

XLM/USD Medium-term bias: Bearish
On the 4-hour chart, before the price breakdown, the bears had been longing to break the support. Several unsuccessful attempts were made before the final breakdown. The coin fell to a new yearly low of $0.042. XLM is consolidating after a pullback at the $0.045 price level.

XLM/USD - 4 Hour Chart

4-hour Chart Indicators Reading
The 21-day and 50-day SMAs are pointing southward indicating the downtrend. The 21-day SMA acts as a resistance to Stellar. The RSI period 14 level 39 indicates that the coin is approaching the range-bound zone.

General Outlook for Stellar
Stellar has fallen to a new yearly low. The bears have absolute control over the coin. In other words, the selling pressure has been overdone suggesting bulls to take control of price. The coin is consolidating above $0.045 price level. A bounce at the current level will result in stiff resistance at $0.050.

Stellar Trade Signal
Instrument: XLM/USD
Order: Buy Limit
Entry price: $0.041
Stop: $0.035
Target: $0.08

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.