2023-10-19 13:00 |
The Stellar (XLM) price has fallen under a long-term descending resistance trendline since July 13.
On October 9, XLM broke down from the $0.110 horizontal support area and was rejected when attempting to reclaim it. How long will this XLM price rejection continue?
Stellar Fails to Reclaim Long-Term SupportThe daily time frame technical analysis for XLM shows that the price has decreased under a descending resistance trendline since July 12. At the time, the cryptocurrency had just reached its yearly high of $0.197.
During the descent, the altcoin broke down below the $0.110 area. When combined with the long-term descending trendline, the area created a descending triangle, considered a bearish pattern.
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The Stellar price failed to reclaim the resistance trendline and the $0.110 resistance area but was rejected on October 16 (red icon).
This XLM price rejection catalyzed the current decrease.
XLM/USDT Daily Chart. Source: TradingViewThe daily Relative Strength Index (RSI) indicates a bearish trend. Traders rely on this momentum indicator to evaluate whether a market is in an overbought or oversold condition, which helps them decide whether to buy or sell an asset.
When the RSI reading is above 50, the upward trend favors the bullish stance. Conversely, if the RSI reading is below 50, it suggests the opposite.
Given that the RSI is below 50 and declining, it indicates a bearish trend in the Stellar price.
However, it is worth mentioning that the indicator reached oversold territory on October 15. The previous two times (white icons) this occurred, a significant increase followed.
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XLM Price Prediction: How Long Will Fall Continue?Due to the bearish RSI and the failed attempt at a reclaim, the most likely future XLM outlook is the continuing decrease.
A drop that continues for the entire pattern’s height (black) will take the XLM price slightly below the $0.076 horizontal support area, which has been in place since March.
The decrease would be 30% when measured from the current price.
XLM/USDT Daily Chart. Source: TradingViewDespite this bearish XLM price prediction, the oversold RSI could catalyze an increase. For this to occur, the altcoin has to break out from the trendline and the $0.110 resistance area.
In that case, a 30% increase to $0.140 could occur. The magnitude of the increase would be in line with the previous upward movements (green) caused by the oversold RSI.
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The post Why Is Stellar (XLM) Price Dropping? This Indicator Might Hold the Answer to Its Recovery appeared first on BeInCrypto.
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