The Stellar Lumens price is finding $0.40 a tough nut to crack. As a result, XLM is on its way to a must-hold level which will decide its fate. Like most of the cryptocurrency market, Stellar has spent the last two weeks in limbo, undergoing a period of price discovery. And soon, we will discover which path the price will take.
Stellar Lumens (XLM/USD) has seen a return to form recently. Bitcoins’ ascent to $50,000 has encouraged investors to return in droves to the out-of-favour altcoin market. As a result, many coins and tokens have enjoyed incredible bull runs. And some, such as Cardano (ADA/USD), have even surpassed the heights achieved earlier this year. However, despite gaining 114% from July’s low, Stellar was still half the price of that in May. Furthermore, XLM has since given back 20% of the rally. Not only has this foiled the chances of a breakout, but it has also left the Stellar Lumens price in danger of breaking down.
Turning to the daily chart, we see that Stellar has been testing the resistance of a downtrend in place from May’s high of $0.80438. And since the 16th of August, the trend at $0.3800 has consistently rejected the price. This is concerning for the bulls.
Furthermore, after failing to clear trend resistance, XLM has fallen towards a tight group of moving averages, the 50 DMA at $0.3207, the 100 at $0.3330, and the important 200-day at $0.3358. With XLM trading at $0.3415 (-2.37%), we will soon determine if the averages will stem the decline. If they don’t, horizontal support at $0.3000 must. And a failure to hold this level would signal a return to July’s $0.1950 low.
However, this bearish outlook is relevant, only whilst the Stellar Lumens price remains beneath the trend line at $0.3800. A close above this level would invalidate the bearish call and suggest XLM is breaking out to the upside.
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