- Summary:
- In this article, we explain why the Stellar price may soon decline sharply based on the rising wedge pattern on the daily chart
The Stellar Lumens price has lost momentum, a few days after it rallied to its all-time high. The XLM is trading at $0.5138, which is 25% below its all-time high of $0.6887. Its market value has also dropped to more than $11.7 billion making it the 14th biggest digital currency in the world.
What happened: Like all cryptocurrencies, Stellar rallied last week ahead of the Coinbase direct listing that saw the company start trading at the Nasdaq. The rally pushed the currency’s price to the all-time level of $0.6887. However, this rally was short-lived as Stellar declined sharply into the weekend. This happened as other currencies like Bitcoin and Ethereum also fell.
Stellar is now attempting to bounce back. It has risen by more than 5% in the past 24 hours and is still 32% below its all-time high.
But what is Stellar? For starters, Stellar is a blockchain project that was developed in 2014. Its network allows developers to issue other assets like digital currencies. Some of the best known projects built on the blockchain network are AnchorUSD, IBM World Wire, and BlockEQ. Lumens, on the other hand, is the native token that powers the Stellar blockchain. It is similar to what Ether does for the Ethereum network.
Stellar Lumens price forecast
A look at the daily chart shows that the Stellar price momentum has faded recently. The price has formed three ascending peaks in the past few weeks. It also remains above the Ichimoku cloud.
Most notably, the Stellar price seems to be forming the rising wedge pattern that is shown in pink. In fact, it is currently slightly above the lower line of this wedge pattern. This is a concern because a rising wedge pattern is usually a sign of a bearish reversal.
The wedge has a few days remaining until it reaches its confluence zone. Therefore, in my view, the XLM may be about to have a sharper bearish breakout. If this happens, the next level to watch will be the support at $0.25.
Stellar price chart
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