Since hitting its three-year high last year, Stellar (XLM) has tested its long-term trendline support and turned into resistance in December 2021. Since then, it found newer lows as the bears took over the driver’s seat.
A reliable close below the $0.195 support (white) would prime XLM for a near-term pullback. Post that, it would likely continue its breakout rally from the $0.17-$0.19 demand zone. At the time of going to press, XLM was trading at $0.1954, down 1.18% in the last 24 hours.
XLM daily chart
Since XLM hit the $0.8 level, it has reversed downward and traded between the $0.19-$0.39 range for more than eight months. The recent bearish phase marked a down channel (white) on the daily chart as the alt lost close to 63.4% (as of November 10) and hit its 13-month low on February 24.
During this phase, the 20 EMA (red) formed a strong barrier for the bulls. They have been aiming for a sustainable shutdown above this level for over three months now. Meanwhile, XLM fell below a crucial area of value on its Point of Control (red). The decline stopped at the 14-month support ($0.16), where buyers stepped in to kick off a 24.6% recovery leading to a down-channel (yellow) breakout.
With the recent gains, the bulls have created a strong demand zone between $0.17 and $0.19. This range has historically been a good trigger for a reversal. Can history repeat itself? If the price finds a close below the $0.195 level, a pullback towards $0.1906 may be conceivable before the alt picks itself up. Such a rebound could test the upper channel which also coincided with its 50 EMA (cyan).
The RSI has been in an uptrend for the past nine days but still needed to close above the half-line to confirm the change in momentum. Also, the yellow trendline revealed a hidden bearish divergence with the price. This reading confirmed the possibility of a relapse to his support range.
Interestingly, the OBV has been in an uptrend for over a month now and is diverging from the price action. So a hint to underlying buying pressure that would open gates for a rebound from the USD 0.17-$0.19 level.
Taking into account the bearish divergence with RSI, XLM could see a pullback in the near term. After this, the OBV keeps hopes of a rebound from the demand zone alive. In addition, the investors/traders need to consider the broader market sentiment and the developments in the chain in order to make a profitable move.
This post Stellar: HODLing to XLM may be a good idea because…
was published first on https://ambcrypto.com/stellar-hodling-on-to-xlm-may-be-a-good-idea-thanks-to-these-reasons/