- The XLM price continues to decrease, but on a descending channel.
- Six-Hour Stellar Relative Strength Index (RSI) showing a bullish momentum divergence, indicating a rebound
- The $ 0.228 low on June 26 is credible support and strengthens the channel’s centerline.
XLM price triggered a larger symmetrical triangle pattern on July 7th, while it has been trading in a descending channel since June 30th. For now, the longer-term outlook remains bearish, but there is evidence that Stellar is on the cusp of a slight rebound on the intra-day chart, which is the upper trendline of the channel or even the 50 simple six-hour moving average (SMA) could test.
XLM award to give bears a chance to catch their breath
On July 7th, the XLM prize convincingly broke out of a symmetrical triangle pattern, marking the second symmetrical triangle that has been triggered since June 11th. Stellar saw an oversold level at the six-hour RSI after the breakout, but the price rally has been subdued and stalled on the upper trendline of the descending channel, bringing the focus back down.
Today XLM hits support at the June 26th low of $ 0.228, which closely coincides with the channel’s midline at $ 0.229. The constructive response to the June 26 low and the channel centerline combined with the unfolding bullish momentum divergence on the 6-hour RSI suggests an intraday rebound in the coming hours.
As an XLM price rally gains momentum, it will find resistance on the upper trendline of the channel at $ 0.246 and the 50-six-hour SMA at $ 0.252. It would be a bit of a pause in the Stellar decline, but it does provide an entry point for new short positions from agile day traders.
XLM / USD 6-hour chart
As mentioned earlier, the long-term XLM price outlook remains negative, with the symmetrical triangle pattern forecasting a 34% decline from the breakout and a final low of $ 0.171. It would wipe out most of the 2021 gains for Stellar, busting support from the June 22nd low of $ 0.198 and the 78.6% Fibonacci retracement level of the March 2020 to May 2021 rise at $ 0.191.
XLM / USD daily chart
A daily close above $ 0.252 would be the first signal that the decline is over and XLM price is ready to test the apex of the symmetrical triangle at $ 0.278, generating a 20% gain from current price.
The 50-day SMA at $ 0.313 will challenge any stellar strength beyond the apex.
Overall, the six-hour chart shows an opportunity for rebound, but the larger pricing structure continues to target lower prices.
Here, analysts at FXStreet are evaluating where Stellar could go next as it appears destined for higher highs.