Since May last year, Stellar (XLM) has seen a steady downward trend as it marked lower highs while the 13-month support remained at $0.195.
Given last month’s bullish comeback and the rejection of lower prices, a likely close above $0.2217 would propel a test on the down channel’s upper trendline coinciding with the 50 EMA (cyan). At the time of going to press, XLM was trading at $0.2195.
XLM daily chart
Since XLM hit its three-year high on May 16, 2021, it has fallen steeply and has been trading between $0.19-$0.39 for over eight months now. The recent bearish phase marked a down-channel (white) on the daily chart as the alt lost nearly 62% (as of November 10) and hit its low in a year on January 22.
During this phase, the 50 EMA stood as a solid resistance, confirming the long-term downtrend. The decline stopped at the 13-month support ($0.19), where buyers stepped in to start a 29% recovery and test the down-channel’s upper trendline on Feb. 8. Interestingly, a trend reversal occurred as bears approached the USD 0.19 support in July 2021.
Now it seemed likely that history would repeat itself as XLM saw a morning star Candlestick pattern, and the technical indicators confirmed the increasing purchasing power. In addition, the recent bullish comeback formed a strong demand zone (rectangle) near the USD 0.2 level.
Any close above $0.221 would likely lead to a test of around $0.23 before pulling back. Should the bulls fail to close above $0.221, an immediate demand zone retest shouldn’t surprise investors/traders.
The RSI has been in an uptrend for the past month but still needed to close above the half-line to confirm the change in momentum. It needs to bounce back from its trendline support to increase the chances of breaking the $0.221.
The CMF quickly reversed and swung above the half-line, signaling a change in the trend. In addition, The Supertrend revealed a buy signal and confirmed increasing buying pressure.
As XLM bounced back from the crucial $0.195 support, the likelihood of a trend reversal is high as technical indicators confirm increasing buying influence. One can expect a collision between the buyers and sellers between the $0.23 and the demand zone in the days to come before a commit trend. In addition, the broader market sentiment and developments in the chain must be taken into account in order to make a profitable move.
This post These factors could cause a change in Stellar’s long-term trend
was published first on https://ambcrypto.com/these-factors-could-propel-a-change-in-stellars-long-term-trend/