The Stellar Lumens price has been under intense pressure in the past few days. The XLM has dropped by almost 20% and is currently trading at a key support level at $0.3310. At the same time, the total market capitalization has dropped to about $7.9 billion and its ranking has fallen to 21. At its peak, Stellar was among the top ten biggest cryptocurrencies in the world.
The Stellar price made a strong comeback after it declined to $0.1981 in July this year. Indeed, at its peak in August, the XLM was up by more than 105%. This rally was mostly because of the overall performance of cryptocurrencies.
Indeed, the total market value of all cryptocurrencies jumped to more than $2 trillion in August. Therefore, the coin’s recent decline is as part of the overall weakness in key coins, with Bitcoin falling from above $50,000 to the current $47,000.
The Stellar price has lost momentum because the previous rumours have not come to pass. In July, it was widely reported that the Stellar Development Foundation (SDF) was considering placing a bid for MoneyGram. MoneyGram is a leading money transfer company that has operations globally. Therefore, the coin declined because the deal was not confirmed in August.
Meanwhile, the ongoing weakness is mostly because of profit-taking as some traders who bought the dips take profit. The same trend is happening among other cryptocurrencies like Bitcoin and Cardano.
The four-hour chart is not looking good for the XLM price. As you can see, the coin has managed to drop to the 38.2% Fibonacci retracement level. Also, it is trading at an important level of support since the coin has struggled moving below this level several times in August. Another thing is that the coin has formed a descending triangle pattern.
Therefore, while it is too early to tell, we can’t rule out a situation where the coin will break out lower in September. If this happens, the next key level to watch is about $0.3032, which is about 8% below the current level and along the 50% retracement level.