- XLM price has worst day since June 25th, altcoin on its way to test June 22nd low of $ 0.198.
- Stellar’s daily Relative Strength Index (RSI) is nearing its first oversold level since June 21st.
- A return to the 200-week simple moving average (SMA) is the final support before catastrophic results.
XLM price has seen only three positive weeks in the past nine weeks, with the best weekly gain being 3.19%. After the ongoing weak phase, Stellar is now only 15% above the 200-week SMA; an indicator that was last visited in early January. As a result, the downtrend remains firm and the digital asset should test at least the June 22nd low of $ 0.198 in the future.
The XLM price has yet to drive the whales out of the depths
XLM price traded on a parallel descending channel from the June 29 high of $ 0.293, triggering the second symmetrical triangle in a month. On July 16 and July 18, Stellar attempted to break out of the channel but was strongly rejected on both occasions, culminating in today’s -7% decline and renewing the rush to at least the June 22nd low of $ 0.198 testing.
Ahead of a test of the June 22nd low, the lower portion of the parallel descending channel stands at $ 0.205, but it should prove to be a bit of a challenge as the $ 0.198 magnet effect pulls in XLM price. A fall to the June 22nd low would only be a 7% loss from the current Stellar price.
If selling pressure continues or accelerates in the cryptocurrency complex, starting March 2020, XLM price will find support at $ 0.191 at the 78.6% Fibonacci retracement of the rise. However, under the weight of a strong market, Stellar could easily test the 200-week Sma at $ 0.182, a 15% drop from current price, and put the cryptocurrency in an extremely oversold state with the potential for a sustained, multi-week rally is possible to begin.
Any weakness below the 200 week SMA will lead to disastrous results for the XLM price.
XLM / USD daily chart
An opportunity on the long side will become more apparent when the XLM price closes above the July 18th high of $ 0.240. Noticeable resistance appeared at the top of the broken symmetrical triangle at $ 0.278 in July, followed closely by the 50-day SMA at $ 0.292, up 20% from the July 18 high.
A robust cryptocurrency market could extend the rally to the apex of the first broken symmetric triangle in June at $ 0.341, and if all is right for Stellar, a test of the 200-day SMA at $ 0.386.
XLM price is approaching a tipping point where a further -7% decline could mark the end of the sharp correction from the May high. Still, the current pricing structure remains vulnerable to major losses as the whales fail to show up to benefit from the low prices, which puts Stellar in a mess.