XLM’s recent 7% bounce was significantly stronger than most cryptocurrencies like Bitcoin which only experienced a 4% bounce yesterday. Unfortunately, this doesn’t mean that XLM is safe as yesterday’s trading volume was quite low considering the magnitude of the bounce. This could easily be a ‘dead cat bounce’ which happens whenever an asset is freefalling but suddenly experiences a sharp spike.
XLM is nowhere close to changing the daily downtrend as the last high is all the way up at $0.0735 while XLM is trading at $0.058 currently. The bulls are also facing the 12-period EMA resistance at $0.062 and the 26-period EMA at $0.065.
Can The Bulls Take The Lead In The Short Term?
The 4-hour chart has finally been positive for the bulls which were able to blast above several resistances to the upside including the 12 and 26-period EMAs. Unfortunately, the move didn’t last too long as XLM is back below both EMAs.
XLMUSDT Chart By TradingView
The bulls can still easily set a higher low compared to $0.0548 and then look for a trend change but trading volume is not in their favor right now. The hourly chart has flipped bearish again after bulls were unable to defend the recent $0.058 support level.
The RSI (Relative Strength Index) is now close to the oversold area and could help the bulls set that 4-hour higher low.
The Stellar Development Foundation has recently completed a significant $715,000 investment in the DSTOQ exchange which intends to tokenize securities using the Stellar Blockchain.
This recent investment didn’t help XLM as the digital asset continued to crash but could play out a role in the near future if the markets recover.
Most technical indicators at this point are signaling to sell on most time frames including longer time frames like the weekly or monthly frames. XLM Bulls need to defend the $0.054 support area which at this point has become a double bottom but was also tested back on January 24th.
There is a small chance for Stellar to take off but we won’t know for sure until the few next days which will definitely give us more clarity about the direction XLM will take.
