The Stellar (XLM) Price Approaches Long-Term Support
The price of Stellar (XLM) has been declining since reaching its yearly high in July and is now approaching a significant long-term support level at $0.105. Although the price briefly broke out from a short-term descending resistance line, it was unable to sustain its upward movement.
Stellar Decreases After Rejection
On the daily time frame, technical analysis shows that the XLM price has been trading below a descending resistance line since July 13. The decline led to a low of $0.105 on August 17, but the price bounced back and broke out from the resistance line on September 4.
However, the XLM price failed to surpass the $0.135 horizontal resistance area and was rejected on September 11. Since then, it has been falling and is now approaching the $0.110 horizontal support area. A breakdown from this support level could lead to a 15% drop to $0.095, while a bounce could result in a 20% increase to $0.135.
Daily RSI Indicates Bearish Trend
The daily Relative Strength Index (RSI) is currently bearish. Traders use the RSI as a momentum indicator to determine whether a market is overbought or oversold and to make decisions about buying or selling an asset.
When the RSI reading is above 50 and trending upward, it indicates that bulls have an advantage. Conversely, if the reading is below 50, it suggests a bearish trend. In this case, the RSI is below 50 and falling, indicating that the cryptocurrency is likely to break below $0.110.
XLM Price Prediction: Channel Breakdown Points to New Lows
The six-hour timeframe also supports a bearish outlook, which aligns with the daily timeframe analysis. XLM broke down from an ascending parallel channel on September 17, indicating that the previous movement was corrective.
The movement within the channel resembles an A-B-C corrective structure, further confirming the bearish trend. According to Elliott Wave theory, this suggests that the XLM price has started a new downward movement.
Next Support Level and Potential Reversal
If the XLM price breaks below the recent lows of $0.105, the next Fibonacci support level will be at $0.087. This level is created by the 1.61 external retracement level of the previous bounce and combined with the previous horizontal support area.
Despite the bearish prediction, a significant bounce at $0.110 could trigger a temporary trend reversal, potentially pushing the price up by 20% to reach the $0.130 resistance level.
Hot Take: Stellar (XLM) Nears Critical Support Level
The Stellar (XLM) price has been declining since reaching its yearly high in July and is now approaching a crucial long-term support level at $0.105. The recent rejection at the $0.135 resistance area suggests a bearish trend, with potential further downside if the support level is broken.
However, there is a possibility of a temporary reversal if the price bounces off the $0.110 support level. Traders should closely monitor these key levels and consider them when making trading decisions for XLM.
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